Groundnut an important oil seed crop provides significant sources of cash through the sales of seed, cakes, oil and haulms. Groundnut plays an important role in the diets of rural populations. Groundnut pod yields from farmer’s field are low, averaging about 800 kg per ha, less than one-third the potential yield of 3000 kg per ha. This large gap is of concern and in view of this, the study was carried out to assess the socio economic characteristics of groundnut farmers, determine the level of profitability of groundnut production, the resource use efficiency as well as to find out problems encountered in groundnut production in Sabon-gari local government area. Seventy-nine farmers involved in groundnut production were randomly selected from the various farms located within the local government area. Data were collected using primary and secondary sources. To examine the profitability of groundnut production, the gross margin and cost benefit analysis were carried out. The result of the study shows that experienced farmers are less involved in groundnut production and most groundnut farmers are engaged in other form of businesses. The cost, availability, and lack of technical knowledge of inputs requirements are responsible for poor use of the inputs. Labour, fertilizer, seed and herbicides are all over utilized except insecticide which is underutilized. Among the problems encountered in groundnut production in the study are lacks of capital and extension services. These two problems accounted for over 78% of the problem of groundnut in the study area. It is therefore recommended that government and research institutes should strengthen extension services to deliver improved technologies to the farmers. Farmers are also advised to source for loans through cooperatives, banks and other available sources at low charges and the procedure for loan should be made simple to enable farmers’ access loans so that groundnut production can be improved.