Fish feed constitutes 40-60% of the total operational costs of a fish farm. Commercial feeds are often too expensive for rural fish farmers. Consequently, farmers use non-conventional and locally available fish feed ingredients including agro-industrial by-products. These feeds have not led to increased pond productivity due to poor processing, higher fibre content, and anti-nutritional factors that limit nutrient bio-availability. Farmers have not embraced processing of fish feeds because the cost-effectiveness of processing has not been clearly demonstrated. The African catfish (
Clarias gariepinus
) is an important farmed fish in sub-Saharan Africa hence the need for research on its nutrition and growth performance. The growth performance and cost-benefit of using pelleted diets formulated from locally available feed ingredients on
C. gariepinus were evaluated in a rural African setting. The experiment included diets that differed in the ingredients and form used (pelleted and un-pelleted). Four isocaloric and isonitrogenous diets were formulated from freshwater shrimp (
Caridina nilotica
), rice bran (
Oryza sativa
) and wheat bran (
Triticum aestivum
). The diets were
C. nilotica and wheat bran pelleted (CWBp),
C. nilotica and wheat bran un-pelleted (CWBup),
C. nilotica and rice bran pelleted (CRBp), and
C. nilotica and rice bran un-pelleted (CRBup). The diets were fed to
C. gariepinus fingerlings (mean initial weight 1.75±0.03g), in triplicates for 5 months. The pelleted diets showed significantly better performance (P<0.05) compared to the un-pelleted diets. Fish grew to a weight of 266.77±6.21g on CWBp, 224.9±3.91g on CRBp, 211.38±4.46g on CWBup and 190.87±4.47g on CRBup. Cost benefit analysis of the pelleted and un-pelleted diets indicated positive net returns of US$ 180.1 for CWBp, US$142.5 for CRBp, US$ 126.8 for CWBup and US$ 115.5 for CRBup. The CWBp had significantly higher net returns than the other diets. This paper demonstrates that although on-farm pelleting of diets adds extra cost of labour, pelleted diets are cost-effective and should be incorporated as an essential part of on-farm feed production.