Analysis of Forest-Based Enterprises and Income Inequalities among Rural Households in South-Western Nigeria

This study analyses economic importance of forest-based enterprises and income inequality among forest indigenous households in South-western Nigeria. Descriptive statistics, budgetary analysis and Gini coefficient decomposable technique were used to estimate income inequalities among forest entrepreneurs. For every N1000 invested on high income yielding forest-based Enterprises, 243 on the average was realized as profit while 184 and 125 on the average were realized as profit on middle income yielding and low income yielding forest-based Enterprises respectively. Forest-based enterprises are profitable ventures with higher market efficiency in South-western Nigeria having the average investment worth of 127, 022 and profitability index of 0.192 on the aggregate. Also, aggregate income inequality for the region was 0.73 and engaging in diverse income sources would reduce income inequality. Finally, forest enterprises income is the most inequality decreasing business with a correlation coefficient of 0.72 followed by commerce income with a correlation coefficient of 0.91. Forest-based approaches, such as market development for forest products like wood, bush meat, wood crafts, furniture making and pole should be aided. Also, credit facilities should be made friendly accessible to local traders to boost their commerce particularly the low return forest based businesses while the economy-environment trade-offs of forest resources should be minimized.