ECONOMIC ANALYSIS OF CHARCOAL MARKETING IN ONDO METROPOLIS, ONDO STATE, NIGERIA

Abstract

This study conducted an economic analysis of charcoal marketing in Ondo metropolis, Ondo State, Nigeria. A multistage sampling procedure was employed to select the sample for this investigation. Data were collected on various aspects, including socio-economic characteristics, challenges faced, employment status, and the primary occupation of charcoal marketers, utilizing a self-structured questionnaire. The instrument underwent validation by experts to ensure both face and content validity. The collected data were analyzed using descriptive statistics, as well as budgetary and profitability analysis. The results revealed that the mean age of charcoal marketers was 47.5±8.4 years, with a majority of 62.8% being female and 56.6% married, living in households with an average size of 7.0±3.0 members. Additionally, the findings highlighted that inadequate capital and high transportation costs were among the key challenges confronting charcoal marketers in the region. The budgetary analysis revealed a net marketing margin, while the profitability ratios indicated that the net marketing margin was N90,2500, and the gross and operating ratios, along with the return on investment, were calculated at 0.7409, 0.117, and 1.1649, respectively. These results suggest that charcoal marketing is both viable and profitable, yielding a favourable return on each naira invested in the business. Furthermore, the analysis of profit margin drivers revealed that factors such as age, education, household size, capital outlay, and access to credit have a significant impact on profit margins. Based on these findings, it is recommended that efforts be made to improve access to credit, reduce transportation costs through subsidies, and enhance government support services aimed at small-scale businesses.