This mini-dissertation contains the results of research to establish a[1 economic value for the mangroves of the Mngazana Estuary in the Eastern Cape. The research is presented in two parts. Component A comprises the literature review and also describes the scope and context for the study, its purpose and the proposed methodology. Component B presents the results of the research in the format of an article to be submitted for publication to the African Journal of Marine Science. Estuaries and mangroves are among the most threatened habitats in South Africa, with the third largest mangrove forest in South Africa at the Mngazana Estuary on the Wild Coast of the Eastern Cape gradually reducing in size. A lack of appreciation of their value has resulted in policies and decisions that promoted the conversion of estuary and mangrove ecosystems to alternative uses, and caused a large-scale loss of mangroves throughout the world. Apart from their key ecological role, the Mngazana Estuary mangroves provide important benefits to the 645 households in three villages that utilise the resources and the sustainable use and management of the mangroves is essential. Economic valuation ascribes values to traded and untraded environmental resources and is a tool that supports policy formulation and decision-making on sustainable management of resources like mangroves. The theory of total economic value provides the conceptual framework for estimating the economic value, but constraints limited this study to estimating the socio-economically significant benefits the mangroves bestow on the communities around the Mngazana Estuary. Using information collected in a household survey and focus group discussions, market-price methods were used to estimate the value of mangroves harvested for building materials and the subsistence consumption of fish by the communities. Values were estimated for mangrove-dependent canoe trails and honey production operations, while a recreational use value was estimated on the basis of travel costs and expenses incurred by visitors to the holiday cottages adjacent to the estuary. The results were incorporated in 20-year valuation models with the net annual benefits then discounted to present value terms. Sensitivity analysis was performed to estimate lower-bound, upper-bound and most-likely values for the benefits. The minimum economic value of the mangroves was estimated to be between R1.1 and R13.6 million, with a most-likely value at a real 5% discount rate of R7.4 million. This study has shown that policies for managing environmental resources must be ecologically, socially and economically sound. This requires an integrated approach to address the socio-economic needs of local communities while safe-guarding environmental resources. / Thesis (M.Sc.)-University of KwaZulu-Natal, Pietermaritzburg, 2004.