Nov. 2013. Vol. 1, No.1 ISSN 2311-2476 International Journal of Research In Agriculture and Food Sciences © 2013 IJRAFS & K.A.J. All rights reserved http://www.ijsk.org/ijrafs.html 1 AN EVALUATION OF EXTERNALITIES LINKED TO NIGERIAN FORESTS . Sulaiman AdesinaYusuf, Mistura Adedoyin Rufai , Joseph Oluwaseun Komolafe Department of Agricultural Economics,University of Ibadan, Nigeria e-mail: yusufsina@yahoo.con, dmisty28@yahoo.co.uk, joe.komolafe@yahoo.com ABSTRACT: Forests produce goods and services (externalities) which are not reflected in conventional market transactions and are rarely considered in government plans. Externalities can be positive (benefits) or negative (loss) with values often difficult to assess. The identification and valuation of forest externalities are essential for proper policy formulations and sustainable forest development in Nigeria. Using different evaluation methods positive externalities and negative externalities were valued. Positive externalities included are grazing, carbon sequestration, fuel wood and charcoal and biodiversity conservation. On the other hand negative externalities identified for Nigeria were erosion floods and landslides and forest fires. The positive externalities had a Total Economic Value (TEV) of N265.883 billion with fuel wood and charcoal having the highest contribution of 41.62 percent while the negative ones had a TEV ofN4.201billion. Both types of externalities had a net value of N261.682billion.From the foregoing, Nigerian forests made net positive externalities to the Nigerian economy. In order to sustain these net positive externalities to the Nigerian economy, there is need for forest conservation. Key Words: Evaluation, Externalities, Nigeria, and Forest INTRODUCTION Nigeria is characterized by different ecological zones ranging from a belt of mangrove swamps and tropical forest along the coast to open woodlands and savannah on the low plateau which extends through much part of the country to the semi-arid plains in the north and highlands in the east. The combined effect of temperature, humidity and rainfall and particularly the variations that occur in the rainfall pattern of the natural vegetation zone exerts a major influence on the types of indigenous plants that grow or can be introduced in any part of the country. However of all the ecological zones in Nigeria, forests harbor the bulk of the globally important biodiversity of the nation even though they are small in extent when compared to other ecosystems (USAID, 2008).According to the International Tropical Timber Organization (ITTO 2011), Nigeria has an estimated forest area of 4.11 million hectares, comprising 2.72 million hectares of natural production forests, 1.01 million hectares of protection forest and 375,000 hectares of planted forest. Nigeria’s forest provides significant economic, social and ecological benefits for citizenry. It is also of global importance as the canopies of its multiple plant species help in temperature modulation thus reducing the effects of climate change while the various crop races of grains originating from its core help feed the world. Nigeria’s forests have continued to make economic contributions to agriculture and the nation’s national income even though the real contributions from forestry may not have been totally captured due to data paucity within the country (Adekunle et al, 2010). Nigeria has lost a vast amount of its forests as a result of various human activities. Forests are cleared for