Shea Nuts Ban: CPPE Canvases Phased Transition Implementation

–  Says instantaneous ban creating severe disruptions, hurting farmers, others

Dike Onwuamaeze

The Centre for the Promotion of Private Enterprise (CPPE) has advised the federal government to carry out phased implementation of its six-month ban or export of shea nuts in order to safeguard investors’ confidence, preserve hard-won gains in non-oil exports and ensure inclusive, market-driven growth.

The Chief Executive Officer of CPPE, Dr. Muda Yusuf, gave this advice yesterday in a policy brief titled “Managing Nigeria’s Shea Nut Export Ban: Balancing Value Addition With Economic Inclusion.”

Yusuf pointed out the goal is laudable because it is intended to accelerate domestic value addition and support Nigeria’s industrialisation drive, but stated the instantaneous implementation of the ban has created severe disruptions in the shea nut value chain by hurting farmers, aggregators, exporters, and logistics providers.

He 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.”  

Yusuf added that “this brief argues for a phased, consultative transition framework to safeguard investor confidence, preserve hard-won gains in non-oil exports, and ensure inclusive, market-driven growth.

“Nigeria holds significant potential in the global shea nut market, accounting for an estimated 40% of global production. Moving up the value chain through local processing could generate jobs, foreign exchange, and industrial capacity.

“However, policy credibility is crucial as sudden bans on exports 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.”

He said the challenges that could be associated with the ban are market disruptions and price collapse, investor’s confidence risk, as well as employment and social impacts.

He said: “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.”

He added that “loan defaults loom large, as many exporters rely on bank financing for procurement and aggregation.”

According to him, abrupt policy shifts send negative signals to investors, who might perceive higher policy risk in Nigeria.

“The progress made in non-oil exports, which is over $3 billion in the first quarter of 2025, could be reversed if confidence declines.

“In addition, the ban threatens thousands of jobs in cultivation, aggregation, logistics, and trade in shea nuts,” Yusuf said.

He also argued that “the policy effectively penalises primary producers to benefit processors, creating a zero-sum scenario rather than a shared-growth model.”

He, therefore, recommended an introduction of clear timelines for phasing out raw exports, in a manner that would allow businesses to adjust their operations.

He also recommended that government should “permit fulfillment of existing export contracts to prevent defaults and maintain Nigeria’s credibility” and address structural challenges such as “power supply, logistics, infrastructure and financing to enable processors to purchase raw materials at market prices and still compete internationally.”

Yusuf also advised the government to promote innovation and efficiency in processing rather than reliance on artificially low input costs.

He asked government to sustain rural livelihoods, incentivise production and ensure that farmers capture fair market value for their produce.

According to Yusuf, government should “avoid policies that force primary producers to subsidise processors indirectly” and institutionalise stakeholders’ engagement.

He said that government should “establish regular consultative platforms involving farmers, processors, exporters, and financiers” and “improve policy predictability and transparency to build investor trust.”