Economic Analysis of Cane Furniture Production in Rivers State, Nigeria

Abstract

Cane furniture business has provided support for households for decades in the tropical rainforest regions due to the utilization, aesthetic and durability of its products. This study evaluates the viability of the enterprise among cane furniture producers in Eleme, Obio Akpor, Oyigbo and Port Harcourt city Local Government Areas (LGA) of Rivers State, Nigeria. Data obtained from the randomly administered questionnaires were analyzed using net income to assess the profitability of the enterprise. Benefit cost analysis was used to determine the viability of the enterprise while Rate of Returns on Investment (RORI) was calculated to determine the rate at which the money invested on the enterprise could be realized. Results revealed that cane furniture production is profitable in all the four (4) LGAs assessed. Mean profit margins over three years were lower in Eleme (N225,933.00) and Port Harcourt (N170,334.00) LGAs because the entrepreneurs were mainly on part time production, while producers in Obio Akpor (N1,621,386.00) and Oyigbo (N1,061,219.00) LGAs had higher profits because they operate on full time basis. Computed RORI showed that the enterprise is worthwhile in the area, with 210.72%, 182.72%, 66.32% and 29.82% in Obio Akpor, Oyigbo, Eleme and Port Harcourt city respectively. Also benefit cost analysis showed viability of the business. Majority of cane furniture producers were males (98.75%) and mostly middle-aged individuals between 20 and 49 years old. Awareness of the prospects in the business will create job opportunities for the teeming population; investment in cane furniture production is capable of generating good income for households. Incentives in form of improved and affordable tools from poverty alleviation agencies are recommended as panacea for higher profits in cane furniture production.

Keywords: Cane furniture, profitability, RORI, Rattan, Nigeria.