Nigeria’s six-month ban on raw shea nut exports has set off a wave of disruptions across the industry, slashing commodity prices by over 30 per cent and threatening livelihoods across the value chain. Since the policy’s takeoff, farmers, aggregators, and exporters have grappled with collapsing incomes, halted trade, and the risk of default on existing export contracts.
Announced on August 26, 2025, the directive—approved by President Bola Tinubu and unveiled by Vice President Kashim Shettima at a multi-stakeholder meeting in Abuja—was billed as a strategic intervention to boost domestic processing and curb informal trade. Shettima described it as a “pro-value addition policy” designed to retain raw materials for local industries and create jobs.
The suspension, to be reviewed after six months, aims to stabilise the shea sector and help Nigeria capture up to $300 million in annual revenue through value-added exports. Yet, the immediate implementation has created economic tremors, with stakeholders warning of unintended consequences that could undermine the very goals the policy seeks to achieve.
Policy Fallout: Market Disruption and Contract Risks
According to industry sources, the abrupt halt in raw exports has upended trade flows, with exporters facing potential legal exposure from unfulfilled contracts and looming loan defaults, as many depend on bank financing for procurement.
Analysts argue that while the intent to promote local processing is commendable, the lack of transition planning has damaged investor confidence and distorted market dynamics.
“The sudden implementation has created severe disruptions in the shea nut value chain—hurting farmers, aggregators, exporters, and logistics providers,” one trade analyst said. “What we needed was a phased transition, not a shock therapy.”
Nigeria is one of the world’s largest producers of shea nuts, contributing an estimated 40 per cent of global output. Experts note that moving up the value chain through local processing could generate thousands of jobs and strengthen non-oil exports—but only if policy execution aligns with market realities.
CPPE Cautions Against Policy Volatility
In a policy brief titled “Managing Nigeria’s Shea Nut Export Ban: Balancing Value Addition With Economic Inclusion,” the Centre for the Promotion of Private Enterprise (CPPE) warned that abrupt interventions erode investor confidence and could reverse gains in non-oil exports, which topped $3 billion in the first quarter of 2025.
The CPPE’s Chief Executive Officer, Dr. Muda Yusuf, said the decision introduced unnecessary uncertainty and heightened policy risk.
“Abrupt policy shifts send negative signals to investors, who may perceive higher policy risk in Nigeria,” Yusuf said. “The ban threatens thousands of jobs in cultivation, aggregation, logistics, and trade. It effectively penalises primary producers to benefit processors, creating a zero-sum scenario rather than a shared-growth model.”
Proposed Path Forward: Phased Transition and Structural Reforms
To prevent further economic fallout, Yusuf proposed a phased transition framework that allows exporters and processors to adjust gradually, alongside measures to strengthen competitiveness and protect small producers.
“There should be clear timelines for phasing out raw exports, with permits for fulfilling existing contracts to prevent defaults and maintain Nigeria’s credibility,” he said.
He further emphasized the need to tackle structural bottlenecks—such as power, logistics, and infrastructure deficiencies—to enable local processors to compete globally without relying on artificially cheap raw materials.
The CPPE also called for:
- Protection of primary producers to ensure fair market value and sustain rural incomes.
- Promotion of innovation and efficiency in processing rather than input-cost suppression.
- Institutionalised stakeholder engagement platforms involving farmers, processors, exporters, and financiers.
- Improved policy predictability and transparency to rebuild investor trust.
Balancing Value Addition with Inclusion
Yusuf stressed that while local value addition is vital for Nigeria’s economic diversification, it must be pursued strategically and inclusively.
“A phased transition—supported by structural reforms—will protect rural incomes, sustain non-oil export growth, and ensure processors thrive on competitiveness rather than protectionism,” he said. “Policy stability and stakeholder engagement are essential to achieving a win-win outcome for farmers, processors, and the broader economy.”
As the six-month suspension enters its second month, stakeholders await the Federal Government’s review. Whether the policy evolves into a catalyst for industrialisation or a cautionary tale of policy haste will depend on how swiftly and sensitively Nigeria recalibrates its approach.