Forestry plays a significant role in national development through its contribution to ecological balance, energy and industrial activities. The recommended level of national forest cover for Uganda to have a stable ecological system is 30 per cent. The national forest cover as of 2005 was, however, at 18 per cent, having dropped from 24 percent in 1990. This decline which is estimated at 1.8 per cent per annum is largely attributed to increasing demand for agricultural land and fuel wood by the rapidly growing population .  Between 1990 and 2005, a total of 1,329,570 hectares (27 per cent of original forest cover) was lost. The most affected districts in terms of forest cover loss include: Mayuge (100 per cent), Wakiso (86.7 per cent), Mubende (79 per cent), Mityana (59.6 per cent), Kibaale (48.9 per cent), Mukono (36.4 percent), Mpigi (32.6 per cent), Hoima (21.6 per cent) and Masindi (12.2 per cent) (NDP, 2010).

In terms of forest management, there are 698 (1,266,000 hectares) gazetted forest reserves. In addition, another 730,000 hectares are located in national parks and game reserves. The majority of the reserves are less than 1,000 hectares. Of the total gazetted forest reserves, 506 are Central Forest Reserves (CFR) and 192 Local Forest Reserves (LFR). The central forest reserves, which account for 30 percent of the national forest cover, are managed by NFA and UWA while the Local forest reserves are managed by Local Governments. A significant portion of these reserves were degraded especially those under Local Government management. As a remedy to this problem, Government adopted a Public-Private Partnership approach to re-establish these reserves.  By 2002, the level of forest cover in gazetted forest reserves (Protected areas) was 1.34 million hectares (43 per cent) and this reduced to 1.3 million hectares (42 per cent) in 2008 despite efforts by NFA to plant 35,000 hectares within the Protected Areas. Most private investors in gazetted reserves are small to medium scale (up to 500 hectares) tree growers.  

Agency for People Owned Processes will increase hectares of the total tree planted area over the period of five years by promoting publicly managed forest reserves through interesting farmers to venture in privately owned commercial forests.  In terms of investment financing for forestry, donor and local private financing are the major sources therefore carbon trading will be our main strategy employed to catalytically expand national forest cover.