This thesis reports on the findings of a three year study on the economIc aspects of the woodcarving industry in Kenya. Woodcarving provides one of the most important uses of wood in Kenya both in terms of economic returns (export value estimated at US$ 20 million annually) and generation of self-employment opportunities (60,000 carvers and estimated 350,000 dependants). The industry is facing an imminent collapse owing to the depletion of prime carving tree species which has supported it since 1919. The key objectives of the study were; (a) To quantify the diversity of species in trade (volumes) and their pricing trends both for the raw materials and products (carvings); (b) determination of profit margins that accrue from carving activities and prices of these species for alternative uses; (c) to look into the possibility of onfarm production of fast growing species (Azadirachta indica) for carving, as well as Brachylaena huillensis . Each of these was pursued mainly through field surveys at seven main areas where carving is carried out in Kenya. The annual carving volume consumed in Kenya is in excess of 15,000 cubic metres concentrated on about ten tree species. However about 57% of this volume is contributed by Brachylaena huillensis. Diameter profiles of logs of the carving wood is dominated by 10-16 cm diameter timber which is an indication of resource scarcity where juvenile trees are increasingly being targeted. The prices of carving wood are distorted and are far helow the market prices largely due to the prevalence of illegal sourcing from state forests. The study has estimated that the stumpage level for Brachylaena huillensis should be raised from Ksh 4 053 to Ksh 12 000 per m3 if control on the current level of depletion is to be ensured. For the other species, the current stumpage levels need to be raised three fold. The weaknesses of the existing policies and legislation governing the access to carving wood have been examined and appropriate recommendations have been given. However, as a long term measure to benefit the carvers and conservation of the last remaining East African forests, changing buyer and carving wood sourcing behaviour from unsustainable felling of slow growing hardwoods to sustainable on-farm production is discussed. The study demonstrates that Azadirachta indica can attain a carvable size with a dbh of 16 cm in 17 years. The study has also established that potential profits (revenue) which can accrue from carvings made per unit wood volume (one cubic metre of wood or equivalent to about 20 logs of I.Sm long, 20cm diameter) can be as high as Ksh 270,000 within a period of four months. This is about four times the unit value of sawn timber of some of the finest hardwoods in the Kenyan market. The study therefore calls for restrictions on the utilization of these prime carving species on uses other than carving. / Thesis (M.Sc.)-University of Natal, Durban, 2001.