South Africa’s Biodiversity Economy: A Contentious Promise?

16 Sept 2022

Written by Ms Mara Glas

Since 2016, the South African government has taken an interest in supporting sustainable use by promoting the creation of a biodiversity economy (DFFE 2022). The latter seeks to scale rural businesses and cooperatives that source wildlife for their core operations while investing in their conservation. Between 2014 and 2018, terrestrial wildlife use through bioprospecting, ecotourism, hunting and game ranching was estimated to generate an annual US$ 2.47 billion (ALU SOWC 2020). While wildlife use on private land is booming, South African legislation aims to expand the development of equitable and sustainable wildlife value chains onto communal land. The recently released Sustainable Use Assessment by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) underlines the importance of wildlife use to people and nature. “Sustainable use is when biodiversity and ecosystem functioning are maintained while contributing to human well-being.” (IPBES 2022)

Considering international conservation finance actors (ICFAs) as dominant stakeholders in South Africa’s conservation landscape, previous research around Kruger National Park shows that international project funding on communal lands predominantly focuses on ecotourism rather than diversified wildlife-based economies (Dressler and Büscher, 2008). The latter, which includes consumptive use through harvest (i.e., plucking, fishing, hunting, culling) of wildlife sources, is proving fundamental to mitigating large-scale disturbance of dominant tourism sectors. Given the implications of Covid-19, my study examined ICFAs' views on funding consumptive use of wildlife and the scaling potential of a diversified biodiversity economy in South Africa.

The results suggest that ICFAs have an ambiguous relation to consumptive sustainable use, as also apparent in their South African conservation programs. While ICFAs recognise the dependence of rural livelihoods on the active use of wildlife for traditional and subsistence purposes, their willingness to fund its commercialisation is plagued by uncertainty about  sustainability impacts in the absence of scientific management systems. While the use of plants is internationally accepted and financed, the use of animals, such as trophy hunting and game ranching, faces widespread political opposition. The growing presence of animal welfare organisations at national and international political levels is increasing political pressure on ICFAs, particularly those whose role is to represent national interests. In instances where, despite international trophy import bans, hunting forms part of broader conservation programs, indicative project details are changed are omitted.

Towards a Biodiversity Economy - What are the current limitations and potential to scaling consumptive sustainable use?

Despite the excitement and optimism about the transformative potential of a biodiversity economy in South Africa, ICFAs pointed to shortcomings in the following areas: local resource governance, market and supply chains, and enabling environment.

Whereas sustainable use requires the empowerment and incentivisation of communities to manage and conserve wildlife, insecure land tenure and resource access continue to complicate communities’ bargaining power over and use rights to these resources. Unresolved access rights and little institutional security prevent communities from becoming legitimate actors in wildlife value chains. Unrealised benefits from legally-controlled wildlife harvesting are therefore seen to spur illegal wildlife trade around protected areas.

Furthermore, climatic change and anthropogenic impacts hinder the predictability and controllability of harvests, whereby the supply and revenue from wildlife products are likely to fluctuate. This complicates the planning and scaling of production volumes and their effective market integration. Fluctuating prices result from premature markets that do not yet account for the actual value of wildlife products. On the other hand, internal sector dynamics hamper communal access to different wildlife sectors. Notably, the game meat industry provides few entry possibilities to (black South African) communities seeking to adopt this production model, reinforcing socio-economic inequities and relative sector homogeneity. Alternatively, the scaling of bioprospecting is said to generate less income for communities due to lower prices paid per unit. Despite South Africa's ratification of the Nagoya Protocol, commercial harvesting of wild plants for their genetic components in pharmaceutics still does not adequately remunerate communities. More significant volumes would have to be harvested for tangible benefits at the community level, whereby “quite often you can't have sustainable use with the predictability and quotas needed for really scaling up some of those businesses.” (interview quote). This affects the durability of commercial partnerships with sourcing companies and makes the wild plant trade vulnerable to boom and bust cycles.

Lastly, scaling small-scale activities requires a state-induced enabling environment consisting of regulatory capacity for project financing and multi-stakeholder coordination. Covid-19 has pronounced previous public fiscal restraints straining departmental budgets and mechanisms to facilitate decision-making across different departments and agencies working to formalise biodiversity economy projects. Difficulties in acquiring project financing due to the delayed and limited deployment of international funds and loan shortages for small-scale cooperatives leave only a handful of viable wildlife use initiatives, requiring new actors capable of coping with high investment risk. Meanwhile, growing efforts to attract private sector finance through ICFAs and state-led initiatives are being met with local administrative constraints and nascent regulatory infrastructure to streamline private investments. In contrast, ICFAs mention that long-standing funding experience and its highly-rated investment-return profile render ecotourism the most successfully practised and investment-ready conservation business to be scaled within the biodiversity economy.

Despite these hurdles, ICFAs are optimistic about the growth potential of more holistic biodiversity economy projects. The South African government has developed strategic plans and policies to promote various consumptive wildlife sectors and has already demonstrated the existence of productive infrastructure and scientific research and planning facilities necessary for regional and international commercialisation of wildlife products. The recently completed three-year ABioSA project (ABioSA Summary Report, 2022), involving collaboration between various ICFAs and DFFE, is a successful example of developing community-based wildlife value chains in South Africa. Working with 13 wild plants, the project aimed to create permanent and seasonal jobs to improve rural livelihoods while increasing the value of organic trade products in local and international markets.