Economic Assessment of Rice Enterprises as Entrepreneurship Options in Northern Nigeria

Abstract

Nigeria is the most populous black nation in the world with an unemployment rate of 21%. Most youths in Nigeria prefer white-collar jobs and are ignorant or afraid of becoming entrepreneurs. Agriculture is the mainstay of the Nigeria economy contributing about 31.1% of the nation’s GDP and providing about 70% employment of the working force. It is the major source of raw materials for industries and the reliance on it by many industries makes it an alternative option to be ventured into by youths. A potential entrepreneur faces risk situation when he is required to make a choice between two or more enterprises whose outcomes are not known and must be evaluated in advance with limited information. Thus, this paper assesses the economic viability of rice industry as an entrepreneurship option in northern Nigeria. Northern Nigeria was chosen for the study because of the prevalence of poverty in the area in spite of its relative advantage in agricultural production and distribution over the rest of the country. Several research works conducted on rice in the study area were adequately reviewed. The results showed that the gross margin of rice processors in the area ranged from N25, 542.86 (US$ 182.45) to N 40,618.00 (US$ 290.13) while their net income was from N 25, 514.25 (US$ 182.25) to N54, 000.00 (US$385.71) per month per processor. The results also indicated that rice merchants obtained a gross margin of N 49, 712.50 (US$ 355.09) and a net income of N 47, 879.17 (US$ 341.99) per month per trader. Further, the operating ratio, fixed ratio and gross ratio of rain-fed rice production were 0.59, 0.08 and 0.66 respectively. However, the respective ratios for irrigation production were 0.47, 0.09 and 0.56 which reflect efficiency in rice production. This shows that rice enterprises in northern Nigeria are profitable ventures and are therefore recommended as viable entrepreneurship options to curtail unemployment in the area.