Feasibility Analysis of Leaf-Based Moringa oleifera Plantation in the Nigerian Guinea Savannah: Case Study of University of Ilorin Moringa Plantation

  • JO Animashaun
  • AA Toye

Abstract

This study examined the profitability and economic feasibility of a leaf-based Moringa production and processing under a plantation system in the Nigerian guinea savannah using the University of Ilorin Moringa Plantation as a case study. To achieve this objective, data on production and processing cost and revenue for the 2011/2012 planting season were collected and a simulated 10-year production and cost and revenue scenarios were scheduled based on the assumption of a constant cost and cash inflow over the same period. The cost-benefit was reported using the Return on Investment (ROI), Benefit Cost Ratio (BCR) and the Net Present Value (NPV) analyses. Result indicated an estimated average net profit of N827,109 (USD5, 137) ha/annum from a Total production cost of N1,371,360 (USD8, 580) ha/annum and a gross revenue of N2,200,000.00 (USD13,750) ha/annum derived from the sale of an average of 110kg of processed dry leaf powder output. This indicates the relative profitability of the enterprise. Furthermore, at varying discount rates of 17.5%, 20%, 22.5%, and 25%, the BCR indicated that for every N1 invested in cost, the investor could realize N1.60 in returns, the ROI indicate a profit return turnover of 26.7% of the cost of investment and a NPV estimate at the end of the 10-year period considered the project to be financially worthwhile. Based on these findings, this study recommends the encouragement of Moringa production and value addition development due to the potential it portends for income generation.

Key words: feasibility analysis, Moringa leaf and enterprise

Published
2014-04-16
Section
Articles

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eISSN: 1117-9996