Economic Analysis of Fuelwood Production and Consumption: Evidence from a Nigerian State

Abstract

Aims: Against the backdrop of global and national energy crisis leading to lingering demand and supply gap of cooking energy in Nigeria, this study was designed to identify the consumption pattern of fuelwood products, profitability of fuelwood supply and the major supply determinants in Kogi State, Nigeria. Study design: Cross-sectional study. Place and Duration of Study: Kogi State, Nigeria. Methodology: A total of 90 respondents were randomly selected comprising of 30 respondents each from 3 Local Government Areas (LGAs) of the state (i.e. Olamaboro, Lokoja and Idah LGAs, each representing an agricultural zone). An interview schedule and a set of structured questionnaire were used to collect data from the respondent. Data collected were analyzed using descriptive statistics, various measures of profitability and multiple regression analyses. The semi-log model was chosen as the lead equation out of other three functional forms. The model was subjected to econometric diagnosis (tests for multicollinearity and heteroscedasticity) and having passed the test, it was used for economic analysis. Results: It was found that majority of the respondents used fuelwood for cooking and food processing/preservation. Fuelwood supply business was very profitable with a Profitability Index of 75% and an average profit of about US$3470.03 per annum/supplier. The profitability of the business was largely influenced by education level, experience, market price of fuelwood and distance of supplier/producer from the forest. Conclusion: It was recommended that government should promote the business in a sustainable manner as a way of poverty alleviation, employ extension agents to train the suppliers and plant more forests near urban and rural areas.