Thesis (MScFor (Forest and Wood Science))--University of Stellenbosch, 2005. / Like in many developing countries, forest and woodland resources contribute significantly to ensure the sustainability of livelihoods of rural people of Eritrea. However, the contribution made by forest and woodland resources has been masked due to the inability of the traditional economic valuation methods to reveal the hidden values of forest resources. As a result they do not reflect in GDP accounting, development planning and conservation policymaking. The underestimation of the importance of forest and woodland resources to the rural subsistence economy results in both market and policy failures. These in turn lead to escalated forest degradation, livelihood insecurity, value conflicts and ineffective conservation programmes. The forest and woodlands of administrative sub-zone Dighe were selected as a case study as they comprise trees, shrubs and other non-woody plants of outstanding importance both in terms of socio-economics and biodiversity richness. However, these resources are being rapidly depleted as a result of clearing for commercial agriculture and are under growing pressure due to resettlement of returnees and needs of other social actors. The study was carried out in three representative administrative areas of the sub-zone. A literature survey was carried out to identify the best of traditional neo-classical economic valuation methods to use in this study. Complementary methods from various streams of economics, ethnobotany, ecological anthropology and rural sociology were reviewed. The sub-set of selected marketable items were quantified and monetised based on market-based valuation approaches; and compared with non-marketable roles to indicate the magnitude of full values of the forest and woodland resources. Values that could not be quantified were described qualitatively. A production-consumption analysis of dom palm scrub leaf harvesting for household utensils was carried out. Forest health was investigated based on observation, semi-structured interviews and secondary information. The study revealed that local forests and woodlands provide essential goods and services for subsistence use, to generate income and to reduce vulnerability during times of hardships. Riverine forests, acacia woodlands and scattered trees and shrubs of grassland are the three vegetation types found in the study area. The riverine forest, dominated by dom palm, is a most valuable resource as it provides for multiple uses. Among the many marketable and non-marketable benefits, forests and woodlands provide wild food, construction material, livestock feed, household utensils, firewood, traditional medicine, shade, climate amelioration, erosion control, cultural heritages and scenic values. All members of rural households regardless of age, gender and wealth extract forest products, which minor variation between households and administrative areas. Variability of consumptive use values between households and between administrative areas and other non-marketable values are determined by relative wealth status, seasonality, resource availability and distribution, market outlets and local institutions. The study revealed that the riverine forests and woodland values of the Dighe administrative sub-zone alone have contributed economical values many times greater than US $ 1.43 million per annum for selected quantifiable items only. This would be higher if the other non-marketable forest values were monetised including the livestock grazing and access to watering points. Beyond any doubt, the high local values of forest and woodlands and consequently the contribution to the national economy justify the conservation of the remaining forest. Moreover, the production-consumption analyses showed that the present level of dom scrub leaf harvesting is sustainable. Forest health situation analysis indicates, however, that the entire forest is under immense pressure. Moreover, the findings of this study suggest that conserving forest resource for local values is compatible with the millennium global development agendas.