ECONOMIC ANALYS!S OF GUM ARABIC MARKETING IN NIGERIA (A Case Study Of Borno State

Abstract

The main objective of the study was to determine the causes of declining prices of gum Arabic from Nigeria at international market. The study thus revealed that there were five main constraints facing gum Arabic marketing in Borno State (the study area) which probably is reflected in the international market of gum Arabic. Three of these constraints were significant which include poor government support, lack of capital and adulteration of product by the marketers. The study also indicated that Nigeria is second to Sudan in the World supply of gum Arabic with 7000- 8000 metric tonnes of production per annum; and this accounted for 10% world supply of gum arabic. The gum Arabic market in Borno State was dominated by cooperative buyers by 80% of the total respondent marketers. This implied that these were agents of big companies that monopolized the gum Arabic market in the state. The study also revealed that marketing of gum Arabic in Borno State has long been in practice. This was indicated by 64% of the total respondent marketers with 15 years and above experience in gum arabic marketing. The profitability analysis of the study revealed that marketing of gum Arabic in Borno State was profitable; though the marketers were not efficient in their resource allocation. The result of elasticity of production and returns to scale of the study indicated that gum Arabic marketing in Borno State was still in stage 1 of production function. This means that adequate allocation of more resources in the marketing of gum Arabic in the state will result to an increase in the quantity of gum Arabic sold in the state, and hence more revenue generation.