AfriPulse
Since the takeoff of the ban on raw shea nut exports, the industry has witnessed market disruptions and price collapse, fallen the price of the commodity by over 30 per cent, and eroding incomes of farmers and aggregators.
As the fallout of the policy, industry analysts say the existing export contracts are currently facing potential default, exposing exporters to legal and reputational risks, just as loan defaults loom large, as many exporters rely on bank financing for procurement and aggregation.
On August 26, 2025, President Bola Tinubu approved an immediate six-month ban on the export of raw shea nuts as part of measures to curb informal trade, boost domestic processing, and protect Nigeria’s shea industry.
The temporary suspension, subject to review at the end of its tenure, is targeted at stabilising the sector and positioning Nigeria to earn about $300m yearly in the short term.
Vice President Kashim Shettima, who announced the directive during a multi-stakeholder meeting at the Presidential Villa, Abuja, said the decision was not “an anti-trade policy, but a pro-value addition policy” designed to secure raw materials for domestic processors and create jobs.
Experts say while the goal is laudable, the instantaneous implementation of the ban has created severe disruptions in the shea nut value chain—hurting farmers, aggregators, exporters, and logistics providers.
They argued for a phased, consultative transition framework to safeguard investor confidence, preserve hard-won gains in non-oil exports, and ensure inclusive, market-driven growth.
Based on existing record, 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, based on the submission of the Centre For The Promotion Of Private Enterpise (CPPE), in a statement titled: “Managing Nigeria’s Shea Nut Export Ban: Balancing Value Addition With Economic Inclusion,” policy credibility is crucial.
The Chief Executive Officer of CPPE, Dr Muda Yusuf, said the sudden ban 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.
Yusuf said the development is capable of putting investors confidence at risk and could also have employment and social impact. “Abrupt policy shifts send negative signals to investors, who may perceive higher policy risk in Nigeria. The progress made in non-oil exports—over $3b 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 shea nuts.The policy effectively penalises primary producers to benefit processors, creating a zero-sum scenario rather than a shared-growth model,” he said.
As solution to the challenge, he recommended the adoption of a phased transition approach; enhance competitiveness of local processing; protection of primary producers; and institutionalising of stakeholder engagement.
“There is need for the introduction of clear timelines for phasing out raw exports, allowing businesses to adjust operations. There should be permit fulfillment of existing export contracts to prevent defaults and maintain Nigeria’s credibility.
“Structural challenges—power supply, logistics, infrastructure, financing must be addressed, to enable processors purchase raw materials at market prices and still compete internationally, likewise the promotion of innovation and efficiency in processing rather than reliance on artificially low input costs.
“There is need to ensure thatfarmers capture fair market value for their produce, sustaining rural livelihoods and incentivising production, and also there should be room to avoid policies that force primary producers to subsidise processors indirectly.
“Regular consultative platforms involving farmers, processors, exporters, and financiers must be established. There is also need to improve policy predictability and transparency to build investor trust,” he said.
Yusuf noted that though 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 subsidised raw materials. Policy stability and stakeholder engagement are essential to achieving a win-win outcome for farmers, processors, and the broader economy.”
Source: Guardian Nigeria | Read the Full Story…
