Tag: shea nut

  • On the shea nut export ban

    On the shea nut export ban

    SIR: Nigeria recently announced a ban on the export of raw shea nuts, a commodity highly sought after in the global cosmetic and food industries. The logic behind the ban is simple: instead of exporting raw shea nuts for processing abroad, Nigeria should process them locally into butter, oil, and related products. This way, the country can capture more of the value chain, encourage industrialization, and empower communities, especially women, who dominate the sector.

    Similar approaches in cocoa and palm oil have been proposed, and in principle, such value-addition policies can transform resource-based economies.

    Yet, Nigeria’s manufacturing sector faces structural bottlenecks that could frustrate this vision. Power shortages, poor road infrastructure, high cost of finance, and insecurity already weigh heavily on agro-processing. Without addressing these constraints, banning raw exports could hurt farmers and traders who rely on foreign buyers. If processors within Nigeria lack the capacity to absorb the supply, farmers risk being stuck with unsold produce, leading to losses rather than empowerment.

    Another concern is enforcement. Nigeria has a long history of policies that look good on paper but fail in practice due to smuggling and weak border controls. If raw shea nuts continue to find their way illegally across borders to Benin or Ghana, the policy will create distortions rather than development. Worse still, such underground trade could enrich middlemen and corrupt officials, undermining the very benefits the ban seeks to achieve.

    That said, the shea sector does present unique opportunities. Northern Nigeria is home to abundant shea trees, and millions of women are already involved in collection and initial processing. If properly harnessed, the sector can become a model for inclusive economic growth, providing income for rural households while feeding into export-oriented industries. To unlock this potential, government must go beyond prohibitions and actively invest in infrastructure, training, and credit facilities for cooperatives.

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    Equally important is the need for public-private partnerships. Global cosmetic giants, local entrepreneurs, and development organizations have already shown interest in the shea value chain. By encouraging investment in processing plants, establishing quality standards, and linking Nigerian producers to international markets, the government can ensure that the sector thrives under the new policy regime. Without these partnerships, the ban risks becoming another isolated directive with limited impact.

    Ultimately, the success or failure of the raw shea nut export ban will depend on implementation. If Nigeria seizes the moment to build processing capacity, strengthen regulation, and empower rural producers, the policy could be a turning point for agro-industrialization. But if it becomes yet another poorly executed restriction, the losers will be the very communities it was meant to uplift.

    • Maryam Iliya Tarpaya, University of Maiduguri.
  • Yusuf calls for balance on shea nut policy

    Yusuf calls for balance on shea nut policy

    Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf has called for a balanced approach in the country’s quest for value-addition in shea nut exports.

    In a policy advisory statement released yesterday, Yusuf said while federal government’s six-month ban on raw shea nut exports was intended to accelerate domestic value addition and support Nigeria’s industrialisation drive, the instantaneous implementation of the ban has created severe disruptions in the shea nut value chain.

    He said the immediate implementation is hurting farmers, aggregators, exporters, and logistics providers.

    According to him, there is need for a phased, consultative transition framework to safeguard investor confidence, preserve hard-won gains in non-oil exports, and ensure inclusive, market-driven growth.

    He said: “Nigeria holds significant potential in the global shea nut market, accounting for an estimated 40 per cent of global production. Moving up the value chain through local processing could generate jobs, foreign exchange, and industrial capacity.

    “However, policy credibility is crucial: sudden bans on exports with immediate effect introduce uncertainty, heighten risk, and undermine investor confidence—deterring investment not just in shea but across the broader non-oil export sector”.

    He outlined that there has been market disruptions and price collapse as shea nut prices have fallen by over 30 per cent since the ban, eroding incomes of farmers and aggregators.

    He added that existing export contracts face potential default, exposing exporters to legal and reputational risks while loan defaults loom large, as many exporters rely on bank financing for procurement and aggregation.

    Yusuf said sudden ban could also jeopardise investor confidence as abrupt policy shifts send negative signals to investors, who may perceive higher policy risk in Nigeria.

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    He said: “The progress made in non-oil exports-over $3 billion in the first quarter of 2025-could be reversed if confidence declines.

    “The ban threatens thousands of jobs in cultivation, aggregation, logistics, and trade in sheanuts.

    “The policy effectively penalises primary producers to benefit processors, creating a zero-sum scenario rather than a shared-growth model”.

    He pointed out that a phased transition approach with clear timelines for phasing out raw exports will allow businesses to adjust operations while permit fulfillment of existing export contracts to prevent defaults and maintain Nigeria’s credibility.

    Yusuf called on government to enhance competitiveness of local processing by addressing structural challenges such as power supply, logistics, infrastructure and financing to enable processors to purchase raw materials at market prices and still compete internationally.

    He said government should also promote innovation and efficiency in processing rather than reliance on artificially low input costs.

    According to him, there is need to protect primary producers by ensuring farmers capture fair market value for their produce, sustaining rural livelihoods and incentivizing production.

    He noted the need to avoid policies that force primary producers to subsidise processors indirectly.

    Yusuf stressed the need for stakeholders’ engagement through establishment of regular consultative platforms involving farmers, processors, exporters, and financiers, thus improving policy predictability and transparency to build investor trust.

    “Local value addition is a critical step toward Nigeria’s economic diversification, but it must be pursued in a way that is strategic, inclusive, and market-friendly.

    “A phased transition-supported by structural reforms-will protect rural incomes, sustain non-oil export growth, and ensure that processors thrive on competitiveness rather than on a regime of subsidized raw materials.

    “Policy stability and stakeholder engagement are essential to achieving a win-win outcome for farmers, processors, and the broader economy,” Yusuf said.