The Centre for the Promotion of Private Enterprise (CPPE), a leading private sector advocacy group in Nigeria, has described the Federal Government’s six-month ban on raw shea nut exports as a desirable step towards boosting the commodity’s production and improving the nation’s non-oil export earnings.
However, the Centre, in a Policy Brief signed on Sunday by its Chief Executive Officer, Dr. Muda Yusuf, noted that though the policy was intended to accelerate domestic value addition and support Nigeria’s industrialization drive, the instantaneous implementation of the ban had severely disrupted the shea nut value chain, with the attendant negative impacts on farmers, aggregators, exporters, and logistics providers.
To address the challenge, the Centre canvassed a phased, consultative transition framework to safeguard investor confidence, preserve hard-won gains in non-oil exports, and ensure inclusive, market-driven growth.
The Centre noted that Nigeria held significant potential in the global shea nut market, accounting for an estimated 40% of global production, adding that moving up the value chain through local processing could generate jobs, foreign exchange, and industrial capacity.
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But then, the CPPE maintained that to achieve the objectives of the policy, credibility of the policy remained crucial as the sudden bans on exports with immediate effect had the potential of creating uncertainty, heighten risk, and undermine investor confidence, deterring investment not just in shea butter nuts but across the broader non-oil export sector.
Specifically, it identified some of the key challenges of the policy as Market Disruptions And Price Collapse with Shea nut prices declining by over 30% since the ban, eroding incomes of farmers and aggregators, just as existing export contracts face potential default, exposing exporters to legal and reputational risks; and loan defaults also loom large, as many exporters rely on bank financing for procurement and aggregation.
In addition, the Centre stated that the immediate implementation of the policy would weaken investor confidence as abrupt policy shifts send negative signals to investors, who may perceive higher policy risk in Nigeria while the progress made in non-oil exports, over $3 billion in the first quarter of 2025, could be reversed if confidence declines.
On the employment and social impact of the ban, it maintained that that the ban would threaten thousands of jobs in cultivation, aggregation, logistics, and trade in sheanuts, as the policy effectively penalized primary producers to benefit processors, creating a zero-sum scenario rather than a shared-growth model.
To mitigate the negative impacts of the shea nuts export ban on the country, the CPPE canvassed four-point recommendations for government to consider in order to achieve a win-win for all in the commodity’s value chains.
First, it advised the government to Adopt a Phased Transition Approach by introducing clear timelines for phasing out raw exports, allowing businesses to adjust operations, and permit fulfillment of existing export contracts to prevent defaults and maintain Nigeria’s credibility.
Also, it maintained that to Enhance Competitiveness of Local Processing, the government should address structural challenges—power supply, logistics, infrastructure, financing—to enable processors to purchase raw materials at market prices and still compete internationally; and promote innovation and efficiency in processing rather than reliance on artificially low input costs.
This is even as it pointed out that to Protect Primary Producers, the government should ensure farmers capture fair market value for their produce, sustaining rural livelihoods and incentivizing production, and also avoid policies that force primary producers to subsidize processors indirectly.
For optimum awareness on the policy, the Centre advised the government to Institutionalize Stakeholder Engagement by establishing regular consultative platforms involving farmers, processors, exporters, and financiers, and improving policy predictability and transparency to build investor trust.
Finally, it stressed: “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”, the CPPE added.
