The Centre for the Promotion of Private Enterprise (CPPE) has urged the federal government to implement a phased transition of its six-month ban on shea nut exports, warning that the sudden policy has disrupted value chains, hurt rural incomes, and undermined investor confidence in Nigeria’s non-oil export sector.
In a policy brief released on Sunday and titled “Managing Nigeria’s Shea Nut Export Ban: Balancing Value Addition With Economic Inclusion”, the Chief Executive Officer of CPPE, Dr. Muda Yusuf, described the policy objective as laudable, given its aim to drive local value addition and industrialisation. However, he stressed that its “instantaneous implementation has created severe disruptions in the shea nut value chain, hurting farmers, aggregators, exporters, and logistics providers.”
Yusuf said: “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.”
He emphasised that Nigeria holds an estimated 40 per cent share of global shea nut production, giving the country significant opportunities in the international market. “Moving up the value chain through local processing could generate jobs, foreign exchange, and industrial capacity. However, policy credibility is crucial. Sudden bans 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 warned.
According to him, the immediate fallout of the ban has been steep. “Shea nut prices have fallen by over 30 per cent since the ban, eroding incomes of farmers and aggregators even as existing export contracts face potential default that can expose exporters to legal and reputational risks. Loan defaults loom large, as many exporters rely on bank financing for procurement and aggregation,” he stated.
Yusuf further cautioned that the progress made in non-oil exports — which generated over $3 billion in the first quarter of 2025 — could be reversed if investor confidence continues to erode. He noted that beyond income losses, “the ban threatens thousands of jobs in cultivation, aggregation, logistics, and trade in shea nuts.”
He criticised the policy for “effectively penalising primary producers to benefit processors, creating a zero-sum scenario rather than a shared-growth model.”
To avert further damage, Yusuf recommended a phased transition framework that includes:Clear timelines for winding down raw shea nut exports, allowing businesses to adjust operations.Permission for existing contracts to be fulfilled to protect Nigeria’s credibility and exporters from defaults.Structural reforms in power, logistics, infrastructure, and financing to enable processors to buy raw materials at market prices and still compete internationally.Promotion of innovation and efficiency in processing rather than reliance on cheap raw inputs,Sustaining rural livelihoods by ensuring farmers capture fair market value for their produce,Regular stakeholder engagement platforms involving farmers, processors, exporters, and financiers to improve transparency and predictability.
“Our call is for government to avoid policies that force primary producers to subsidise processors indirectly,” he said. “The way forward is a consultative transition anchored on inclusiveness, competitiveness, and policy credibility.”
Dike Onwuamaeze
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