Economics of marketing wood fuel in south western Nigeria

Marketing of fuel wood is an important source of livelihood for most parts of Nigeria. The study examined the economics of marketing of wood fuel in south western Nigeria with a view to determine the socio-economic characteristics of the marketers, the profitability of marketing wood fuel, the market structure and constraints to profitability. Data for the study were obtained from a total sample of 100 randomly selected wood fuel marketers through interviews schedules and application of structured questionnaires. Descriptive statistics was used to analyze the socio-economic characteristics of the marketers. Cash analysis was used to determine the profitability of the enterprise while Gini-coefficient was used to examine the markets’ concentration. The result showed that majority of the marketers was in their active years as 51% were between 21-40 years of age. 71% were female while 56% of them were married. Most of the marketers (76%) had formal education and were well experienced in the business. Cash analysis revealed that marketing of wood fuel is profitable with an average Gross margin of 21,190.65 naira per month. The marketing efficiency was found to be 128% and the rate of return on investment was 28% which indicates that for every 100 naira investment in the business, the marketers will enjoy a return of 28 naira. The value of Gini-Coefficient (0.393) indicates high level of market concentration and inefficiency in the market structure. Transportation was the greatest constraint to the business profitability followed by season of the year and government policy.