Affiliation:
1. Department of Agricultural Economics, Agribusiness and Extension, College of Agriculture and Natural Resources, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana.
Abstract
Edible insects are increasingly recognised as a source of nutritional security, poverty reduction and overall household wellbeing, particularly in rural sub-Saharan Africa. In Ghana, for instance, edible insects such as the African palm weevil larvae are integral part of traditional dishes, which are widely consumed among different strata of the Ghanaian society. Following the limited supply of these larvae from the traditional source, deliberate efforts at domestication are being promoted as an investment option in Ghana. This paper uses the case study approach based on data from a modern weevil larvae (akokono) micro-farm in the Ashanti region to analyse the financial viability of an insect-based business to guide future investment decisions. Standard capital budgeting tools such as net present value (NPV), benefit-cost ratio (BCR), internal rate of return (IRR) and payback period were employed to assess the financial viability of an akokono micro-farm of 5.47×7.62 m dimension. The results show that a capital expenditure of Gh₵ 5,333.17 (US$ 935.61) is required to establish the akokono micro-farm. With a five-year project life and cost of capital of 33.5%, the investment appraisal generates a positive NPV (Gh₵ 6,065.89 = US$ 1,164.3), BCR that is greater than unity (1.34), and an IRR (37%) which is above the current lending rate on the financial market in Ghana. The paper concludes that domestication of palm weevil larvae is financially viable at the micro-scale even in the face of pessimistic assumptions. These findings have practical implications for small-scale enterprise development in addressing problems of malnutrition and unemployment among vulnerable groups like women and youth in the rural economy of Ghana.
Publisher
Wageningen Academic Publishers
Subject
Insect Science,Food Science
Cited by
5 articles.
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