Pugu Forest Reserve is a coastal forest covering an area of 2,410 hectares; but has been significantly altered by on-going extraction and conversion to other land uses which releasing carbon dioxide into the atmosphere thus making the forest a net emitter of the greenhouse gases. Though some empirical data exist regarding carbon storage in African coastal forests, little has been done to assess and quantify the carbon stocks and emissions associated with deforestation and/or degradation in all coastal forests, Pugu Forest Reserve inclusive. This study estimated carbon storage of Pugu FR to quantify the above ground carbon in the tree component, the understory carbon components and carbon storage in the soil. An inventory was conducted using a 20m x 40 m (0.08 ha) plots. Above ground tree carbon was determined using an allometric model that uses trees DBH ≥ 5 cm as predictor variable. Carbon storage in litter, herbs and dead wood was determined using Loss of Ignition method, while Walkley-Black method was used to analyse soil carbon. The total carbon density for all 5 pools was 30.95 t C ha-1 equivalents to 113.59 t CO2e ha-1. The mean carbon densities for the above ground components was 6.75 t Cha-1 (24.77 t CO2e ha-1) in which the tree component accounted for 4.5 t C ha -1 equivalent to 16.5 t CO2e ha-1 ( 14.5%); understory components of litter accounted for 0.52 t C ha-1 equivalent to 1.9 t CO2e ha-1 (1.7%); dead wood 1.01 t C ha-1 equivalent to 3.7 t CO2e ha-1 (3.3%), herbs 0.72 t C ha-1 equal to 2.6 t CO2e ha-1 (2.3%) and soil organic carbon stock was 24.2 t C ha-1 equivalent to 88.8 t CO2e ha-1 (78.2%). The mean carbon stored in this forest is lower compared to other coastal forests especially in the above ground component indicating an alarming degradation and destruction. Improved management and restoration of degraded parts can greatly increase the C storage potential and emission mitigation by this forest. Using this information as the baseline carbon stocks; can be potential for participation in carbon trading under the current REDD+ initiatives with contribution to alternative livelihoods and sustainable development to adjacent communities.