Resource-use Efficiency of Shea Nut Processing in Kassena-Nankana West District, Ghana: DEA Approach

Abstract

The Shea tree, Vitellaria paradoxa, has been seen as a very important economic God-given tree with numerous benefits for a longtime. The Shea tree, though under threat due to deforestation, still remain abundant in several communities in Ghana. That notwithstanding, shea nut processors have not been able to fully optimize the gains from the Shea tree and thus, this research examines the Resource-use efficiency of Shea nut processing in the Kassena-Nankana West District of Ghana. Data Envelopment Analysis (DEA) was employed to determine the overall technical, pure technical and scale efficiency of the Shea nut processing while bivariate Tobit was used to identify the sources or determinants of both technical and pure technical efficiencies. A SWOT analysis was carried out to identify the potentials and challenges faced by the Shea processors. It was discovered that on the average, the processors operated 50% of their potential overall technical efficiency, 55% of their potential pure technical efficiency and 92% of their potential scale efficiency. Determinants of processors’ technical efficiency include age, household size, experience, access to credit and membership of processors’ group. The SWOT analysis revealed challenges including poor transportation and difficulty in accessing credit. The study, therefore, recommends that, easy access to financial facilities and sensitization on savings are ways to boost processors’ use of new, efficient technologies to help enhance their Resource-use efficiency. Improvement on the road network to enhance easy movement of goods and services is highly recommended.