Effects Of Oil Exploitation On The Efficiency Of Artisanal Fishing Households In The Niger Delta Region, Nigeria

ABSTRACT

This study presents the empirical analysis of the effects of oil exploitation on the

efficiency of artisanal fishing households in the Niger Delta region, Nigeria. The selection

of respondents was multi-staged and involved purposive sampling as well as random

sampling methods. A structured questionnaire and interview schedule were used to elicit

information from a randomly selected sample of 160 artisanal households from Delta and

Bayelsa States, Nigeria. Descriptive statistics, stochastic frontier production and cost

function models, inefficiency effects model and multiple regression analysis were used in

analyzing the data. Among the major findings were that 84% of the respondents were

male-headed households. Fifty percent were between 41-50 years. Sixty three percent were

illiterates while 87% were married. The average household size was 7 persons. About 49%

of the respondents had fishing experience of above 16 years with a mean experience of

approximately 15 years. The average annual income per household was N96, 386.00.

About 85%, 6%, 6% and 4% used different fishing gears such as nets, trap, longline and

hooks, and fence fishing, respectively. The mean technical efficiency was 73%. The Cobb-

Douglas stochastic frontier model showed that labour, quantity of bait used and capital

inputs had positive signs and were highly significant at 1% level of probability. Age,

access to credit and gender had significant inverse relationship with technical inefficiency

while fishing distance, membership of co-operative society, fishing experience, number of

trips and oil spill had significant positive relationship with technical inefficiency. Model

showed that wage rate, price of baits and output adjusted for statistical noise had direct

relationship with the total cost of production and were significant at 1% level of

probability. The mean economic efficiency was 68%. The factors influencing economic

efficiency showed that Age and household size had a negative relationship with economic

inefficiency while access to credit, membership of co-operative society, number of trips

and oil spill had significant positive relationship with economic inefficiency. Ninety seven

percent of the households confirmed that oil exploitation activities had serious effect on

their socio-economic life. Variables such as fishing equipment, non-fishing income and

household size were significant at 1%, fishing experience was significant at 5% while

micro-credit and compensation received were significant at 10% probability levels. The

overall regression result was statistically significant at 5% level of probability as 86% of

the total variation was explained by the socio-economic variables. Therefore, the study

calls for policies that could reduce the level of oil pollution and increase their technical

and economic efficiency.