Value Chain and Profitability Analysis of Shea Butter Production in Kwara State, Nigeria

Abstract

The study assessed the value chain and economic viability of shea butter production in Kwara State, Nigeria. A well-structured questionnaire was used to gather information from 247 participants in the shea butter value chain industry within the State. Descriptive statistics, gross margin analysis, and linear regression were used to analyze the data gathered. The study found out that the shea nut processors and marketers were women (92%), while men (54,7%) were mostly shea nuts collectors. The average age of collectors was 43 and that of the processors and marketers were 46. Findings also revealed that the shea butter value chain is made up of collectors, assemblers, processors and marketers who perform various functions in getting the butter bye product from the shea nuts to the consumers. According to the profitability analysis that was carried out, the study discovers that the gathering, processing, and sale of shea nuts in the study area were profitable. The gross margin for 100kg of shea nut collected was ₦7,094 (1USD≈450₦) while that of the processors/marketers for 20kg of shea butter produced was ₦16,200. The major constraint facing shea nuts collectors was the felling of shea trees (82.7%) while that of processors/marketers was the lack of modern processing equipment. It is therefore necessary for government to provide credit facilities and modern processing equipment’s for rural women involved in shea butter production to enable them produce in large quantities.