By Aremu Fakunle (PhD) – It is no longer news that the Federal Government of Nigeria has imposed a six-month ban on the export of raw shea nuts. The move seeks to curb informal trade, secure raw materials for domestic processors, and accelerate value addition in one of Nigeria’s most promising non-oil export sectors. Officials note that the shea value chain, if fully developed, could generate up to US$300 million annually for the Nigerian economy.
Why shea matters in Nigeria and West Africa
Shea is more than just a tree crop; it is a lifeline for millions. Across the shea belt, an estimated 16 million rural women are engaged in the collection and processing of the nuts. For many, shea provides crucial seasonal income that sustains households during the farming lean season.
Nigeria is among the world’s largest producers, harvesting approximately 345,000 tonnes in 2023. Demand for shea butter continues to expand globally, with market value projected between US$2.4 and US$3.1 billion for 2024–2025, and strong growth is expected through the next decade. Importantly, shea is not only valued in cosmetics but is increasingly used in the food industry as a cocoa butter equivalent, especially as cocoa prices soar.
What the government announced
The Presidency approved an immediate suspension of raw shea nut exports for six months. The aims are clear:
- Reduce leakages from informal and illegal exports.
- Protect domestic processors with reliable input supply.
- Improve factory utilization and create more rural jobs.
- Shift the export profile from raw kernels to shea butter, oils, and derivatives.
This is framed as a pro-value-addition strategy, designed to reposition Nigeria as a leading supplier of refined shea products.
The shea value chain at a glance
Primary production: Rural women and youths collect, boil, dry, and crack shea nuts to obtain kernels.
Aggregation: Local agents and cooperatives supply traders, with informal cross-border flows remaining common.
Processing: Domestic factories produce shea butter, fractions (stearin/olein), and shea cake for feed or energy.
Markets: Exports go into food (chocolate, bakery, frying fats), cosmetics, and pharmaceuticals.
Enablers: Finance, drying infrastructure, quality standards, and logistics supports are essential to strengthen competitiveness.
The challenges that the ban seeks to address
Informality and leakages: Unrecorded exports undermine revenues from the producing states and also deprive processors of raw material.
Underutilized processing plants: Domestic factories face inconsistent kernel supply and finance gaps.
Quality constraints: High moisture and free-fatty-acid content reduce the value of the kernel and thus limit premium market access.
Price volatility: The incessant swings in the cocoa market affect demand for shea as a substitute, creating instability for collectors and processors alike.
Stakeholder perspectives
As the policy was announced, stakeholders view it differently.
Government: Government and proponents of the policy view the ban as a lever to ring-fence raw materials and strengthen non-oil exports.
Private processors and exporters: Supportive but concerned
While the private sector recognizes and supports the government’s commitment to value addition in the shea industry, there are immediate concerns that need to be addressed if the policy is to achieve its intended goals.
The timing of the announcement has created real challenges. The ban was introduced right in the middle of the shea season, a period when exporters have already signed contracts, secured financing from banks, and in many cases purchased and transported products to ports. This sudden shift places both exporters and their financiers in a difficult position.
The reality is clear: contracts have been signed, products have been bought, and banks are financing some of these transactions. If exports are halted abruptly, questions arise about who bears the losses. Exporters risk contract defaults, and banks that provided structured trade finance against warehouse warrants may be left exposed to bad loans.
Furthermore, processing capacity is not yet fully prepared to absorb the 2025 crop. This raises concerns about what will happen to this year’s harvest and to those rural households whose livelihoods depend on it.
It is important to note that shea is a seasonal crop. A better approach could have been a phased transition, beginning in the off-season, to allow time for stakeholders to prepare and adjust.
Global precedents, such as the EU Deforestation Regulation (EUDR), demonstrated how major policy shifts are often accompanied by extended compliance periods — in that case, 18 months, later extended further when implementation challenges arose. Such an approach minimizes disruption while still signaling strong intent.
Looking ahead, the critical questions that require urgent guidance include:
- How will exporters who risk contract defaults be protected, and will this policy be treated as a case of force majeure?
- How will banks that financed products which can no longer be exported recoup their funds?
- What immediate measures will ensure that the 2025 harvest is not wasted, and that collectors, traders, and processors do not lose their primary seasonal income?
A clear and phased implementation framework covering finance, offtake, and export transition will not only strengthen the policy’s credibility but also ensure that the intended benefits of industrial growth, value addition, and rural income security are fully realized.
Pros and cons of the ban
The decision to suspend raw shea exports has both opportunities and risks. On the positive side, the policy creates a pathway for greater value retention within Nigeria. By processing locally, the country can increase the unit value of its exports. This will guarantee that more of the economic gains remain at home.
If properly managed, the ban also has the potential to improve rural incomes, as women collectors will benefit from formal offtake arrangements and quality-based pricing. Furthermore, expanding the processing segment can drive job creation, stimulate non-oil export growth, and strengthen Nigeria’s position in the global shea market.
At the same time, several risks must be actively managed. In the short term, there is the likelihood of cash flow disruptions if processors are unable to absorb large volumes of kernels quickly enough. Smuggling into neighbouring countries with more flexible trade policies could undermine the effectiveness of the ban.
Processors themselves face liquidity risks if financing is not made available promptly, and the sector as a whole could suffer reputational damage if Nigerian shea quality does not improve to meet the standards expected in international markets.
Lessons from regional case studies
Regional experience offers valuable lessons. In Burkina Faso (2024), a similar suspension stabilized local supply but also triggered smuggling and rural income losses when processors lacked access to finance.
Ghana, learning from this, has announced its intention to ban raw shea exports only by 2026, signaling a more gradual transition toward domestic value addition.
More broadly, the pattern across West Africa — where several producers, including Mali, Côte d’Ivoire, Togo, and Burkina Faso, have paused raw exports in recent years — shows that such policies can tighten supply but also highlight the urgent need for organized, quality-driven value chains to maximize benefits and minimize disruption.
The Nigerian policy therefore has real potential to succeed, but it will require deliberate implementation, adequate financial mechanisms, and strict attention to quality and enforcement to ensure that the gains outweigh the risks.
What success looks like after the six months
The six-month ban provides a unique opportunity to reposition Nigeria’s shea industry. Success should be measured not only in terms of compliance with the policy but also in tangible improvements across the value chain.
Government: A successful outcome would be evident in higher factory utilization, a noticeable reduction in informal exports, and the early growth of exports in processed products such as butter and fractions.
Processors: They should experience reliable access to kernels, availability of trade finance, and more efficient export procedures that allow them to remain competitive in global markets.
Women collectors: Success at the grassroots will mean faster payments, higher prices for properly dried and graded kernels, and improved access to basic infrastructure such as drying platforms and storage facilities.
Economy: Even if only 10–20% of raw exports are redirected into domestic processing, the impact could be significant, with the potential to raise export earnings while reducing informal trade losses.
Policy recommendations for sustainability
To consolidate these gains and ensure that the ban leads to lasting transformation, the following actions are recommended:
Time-bound transparency: Roll out clear timelines, review milestones, and post-ban options such as quotas, tariffs, or conditional permits, so that all stakeholders can plan effectively.
Finance access: Establish blended working-capital facilities for processors and cooperatives. This can be backed by development finance institutions and commercial banks, to ensure liquidity throughout the buying season.
Pay for quality: Introduce differential pricing that rewards kernels that meet international standards on moisture and free-fatty-acid levels, while co-financing drying platforms and other quality-enhancing infrastructure.
Cooperative strengthening: Support cooperative formalization, traceability systems, and contracts with processors. This will ensure that finance flows are tied to timely payments for women collectors.
Standards roll-out: Enforce national quality standards for kernels and establish testing facilities at aggregation hubs to boost Nigeria’s reputation in global markets. Existing aggregation hubs can be upgraded to meet the expected service demand.
Export facilitation: Streamline SON and NAFDAC approvals, and create priority export lanes for processed shea products at Nigerian ports.
Market development: Position Nigerian shea strategically as both a premium cocoa butter equivalent and a natural cosmetic ingredient by leveraging international market trends.
Monitoring and data transparency: Publish monthly dashboards on kernel prices, volumes purchased locally, processor utilization, export volumes, and women’s income levels to build accountability and public trust.
The Ministry of Industry, Trade and Investment, relevant media houses, and the National Orientation Agency can partner to hold monthly review dialogues on the progress made in the implementation of the policy. This will further increase stakeholders’ confidence and trust in what the government is doing. It will also help the government to receive undiluted stakeholders’ views and feedback on the policy implementation process.
By focusing on these outcomes and implementing these recommendations, the government can ensure that the temporary ban evolves into a catalyst for long-term industrial growth, women’s empowerment, and greater non-oil export earnings.
What to watch
As the policy takes effect, several critical areas should be closely monitored to ensure its success and to avoid unintended consequences:
Implementation guidelines: The government should issue clear and practical guidance on exemptions (e.g., in-transit cargo, research samples) and enforcement mechanisms to minimize confusion and disruption.
Border enforcement: State-level border monitoring will be essential to curb smuggling and to ensure that the policy achieves its goal of redirecting kernels into domestic processing.
Processor finance: Adequate liquidity for processors must be made available promptly so that they can absorb the increased domestic kernel supply without delay.
Regional coordination: Engagement with Ghana, Burkina Faso, and other shea-producing neighbours is critical to reduce trade distortions and avoid policy arbitrage across borders.
Market linkages: Early efforts to secure export contracts with confectionery and cosmetic buyers will build confidence in Nigeria’s ability to supply consistent, high-quality processed shea products.
Conclusion
As Vice President Kashim Shettima emphasized when unveiling the policy, the ban is “not an anti-trade policy but a pro-value-addition policy,” designed to secure raw materials for domestic processing, boost rural income, and transform Nigeria from an exporter of raw nuts into a global supplier of refined shea butter, oil, and derivatives.
The six-month export ban should therefore be viewed not as an endpoint, but as a strategic policy window — a critical opportunity to lay the groundwork for long-term industrial competitiveness. With strong financing mechanisms, empowered cooperatives, rigorous enforcement, and an unwavering focus on quality, Nigeria can elevate rural incomes, grow non-oil export earnings, and position itself as a leader in processed shea products.
Let us remember the Vice President’s framing: this is about opening opportunities, not closing doors. The real test will be if we convert this policy pause into a sustainable pathway toward inclusive growth which benefits women collectors, processors, exporters, and the national economy.
Fakunle is a Senior Agribusiness and Policy Expert based in Abuja, Nigeria
