Asia-Pacific Journal of Rural Development Vol. XX/, No. /,July 2011 Economic and Ecological Consequences of Charcoal Production in Oyo State, Nigeria A.A. Aiyeloja*a and U.D. Chima* ABSTRACT The study was carried out to evaluate the economic and ecological consequences of charcoal production in Oyo State, Nigeria. Fifty production sites from five Local Government Areas known for charcoal production selected through a multistage sampling procedure were used for the study. Tree enumeration was also carried out in forests around selected production sites to ascertain the impact of the charcoal enterprise on the populations of tree species preferred for charcoal making. The average cost of producing a bag of charcoal was N235.71 (aboutUS$1.60) while it was sold at an average price of N464.29 (about US$3.00). Both production and sales were on the increase fur the three-year period of the study with 87 per cent, 89 per cent and 97 per cent of the total production sold for 2005, 2006 and 2007 respectively. Rate of Return on Investment (RORI) was 71.12, 76.22 and 90.10; for 2005, 2006 and 2007 respectively. Mean change indices computed for each of the species preferred for charcoal making reveal that Vitellaria paradoxum is the least depleted (39%) followed by Terminalia superba (40%), Nauclea diderrichii and Hellea ciliata (42% each), Afzelia bipindensis and Afzelia africana (45% each), and Anogeissus leiocarpus (47%). Although, charcoal making in the study area is profitable, the current practice is unsustainable. Sound policies and appropriate regulatory laws are suggested to ensure the sustainability of the enterprise. 1.0 Introduction Charcoal production to supply the urban markets and households provides a source of income for large number of rural and urban people (Rahji 2005). This, coupled with increasing populations and incessant outrageous increases in the prices of other energy sources, especially kerosene, has given prominence to the charcoal business which is now spreading rapidly in different parts of Nigeria (Chima 2006). Consumers attraction to and preference for charcoal, have been attributed to several reasons. These include among others, its cheapness, higher energy content than wood, ability to bum with little flame and without smoke, and its ability to resist termite attack and that of other agents of decay (Kammen and Lew 2005). On the other hand, charcoal production tends to be destructive because life-trees and branches are cut instead of the dead ones. Yet these trees are what most rural people depend on to supply their own needs (Earth Scan 1986). Trees provide food such as fruits and nuts; building materials and medicines for local uses; reduce soil erosion, improve soil fertility and play a key role in the regulation of the climate. Rahji (2005) observed • Department of Forestry and Wildlife Management, Faculty of Agriculture, University of Port Harcourt, Rivers State, Nigeria. a Corresponding author. Email: aiyeloja@yahoo.com 85