Financing the Production and Marketing of Shea Butter in Tamale Metropolis

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Date
2010-07-18
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Abstract
Recently, shea butter has emerged as a promising economic commodity and has gained international recognition because of its therapeutic properties. It is the potentials of the commodity that informed this research. The study basically sought to find out the peculiarities of shea butter processing, the level of financing, financial products used to deliver financial services, constraints of the sector as well as examine the policy and regulatory environments of the industry. In view of these objectives, case study research methodology was adopted. This research approach was deemed suitable because it allowed the researcher to collect information from multiple stakeholders to facilitate understanding of the dynamics and peculiarities of financing of production and marketing of the commodity in the Tamale Metropolis. The research however, revealed several pressing issues among which include the lack of effective government policy framework document, inadequate micro finance services, dominance of contract financing, high private sector involvement in the shea industry and lack of marketing finance. NGOs and a few financial organizations have taken steps to respond to these critical issues and realized some successes like the establishment of contract financing transactions and technical support services for producers, but much still needs to be done. In view of the constraints and potentials, major recommendations proposed in the short term include the need for: the establishment of equipment and marketing financing scheme for shea butter processors, the expansion of micro finance services, the provision of support services to sustain financing schemes, literacy training for producers, effective collaboration among stakeholders, monitoring and evaluation of financial and technical support services, among others. Additionally, in the long term, there is the need for a policy framework document to regulate activities of the shea industry in order to facilitate wealth creation and development. Production finance which is handled basically by private entrepreneurs is fairly appreciable. Marketing finance and support services were however deficient. In view of this, effective implementation of the suggestions could lead to the improvement of production and marketing of shea butter in Northern Ghana and eventually result in poverty reduction and development especially among rural women.
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A Thesis Submitted to the Department of Planning, Kwame Nkrumah University of Science and Technology, Kumasi in partial fulfillment of the requirements for the degree of Master of Science
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