Economic Analysis of Cattle Marketing in the Cash Crunch Era in North-East Nigeria

This study analysed the economics of cattle marketing during the 2023 cash crunch in North-East Nigeria, focusing on profitability, price fluctuations, marketing efficiency and the constraints encountered by cattle marketers. Primary data were collected through structured questionnaires and oral interviews from cattle marketers in selected markets across Adamawa, Borno and Taraba States using a multistage sampling procedure. The sampling frame comprised 4,948 marketers, from which 495 respondents were selected. The analytical framework combined descriptive statistics, gross margin analysis, robust Ordinary Least Squares regression, coefficient-difference tests, Stochastic Frontier Analysis and Kendall’s coefficient of concordance. The findings revealed a substantial deterioration in cattle marketing performance during the cash crunch. Average monthly sales declined from ₦46.73 million before the cash crunch to ₦10.78 million during the period, representing a 76.9% reduction, while average monthly profit fell from ₦1.61 million to ₦700,982, a decline of 56.3%. Despite this contraction, cattle marketing remained profitable on average. Access to credit, full-time participation in cattle marketing, education, digital financial literacy, age, association membership, business size, transfer payments and access to market information positively influenced profitability, although their relative effects varied between the pre-crunch and cash-crunch periods. Price fluctuations, particularly for medium-sized cattle, adversely affected marketers’ economic outcomes, while capital and water use contributed positively to marketing efficiency. Cash shortage emerged as the most severe constraint, reflecting the sector’s substantial dependence on liquidity for cattle purchases and other operating expenses. The study concludes that the cash crunch constituted a significant liquidity shock that reduced the scale and profitability of cattle marketing while increasing the importance of credit, digital payment mechanisms, market information and financial capacity. It recommends expanding affordable working-capital finance, strengthening digital financial literacy and payment infrastructure, improving cattle market infrastructure and information systems, and promoting institutional and risk-management mechanisms to enhance the resilience of cattle marketing against future monetary and liquidity shocks.