The SHEA sector significantly contributes to the overall earnings of rural households across various economic strata. It also highlights the pivotal role women play in the gathering and processing of Shea nuts and fruits.

Women, who are responsible for over 90% of Shea nut collection, gain a vital opportunity for economic advancement through this activity, although they remain positioned at the lowest tier of the value chain.

Across Africa, the livelihoods of approximately 16 million rural women engaged in Shea nut harvesting serve as a powerful source of inspiration. Shea is not only economically valuable but also socially significant. It supports the employment of around 4 million women involved in export activities and generates roughly USD 600 million annually at the community level in West Africa. For individual households, Shea can represent up to 12% of total income and as much as 32% of available cash during the lean season. Furthermore, the collection and processing of Shea nuts provide crucial cash income to women in households where alternative earning opportunities are scarce.

Beyond income, Shea nut activities foster economic resilience by building assets and savings, enhance social resilience by empowering women in household decision-making, and offer employment, nutritional benefits, and medicinal uses.

Shea is indispensable to the sustenance of rural women and their families, serving as a key strategy for diversifying livelihoods and mitigating risks related to food insecurity and climate fluctuations.

1. Value Shift Without Fairness

The comprehensive prohibition on exporting raw Shea nuts has led to a distorted market dynamic characterized by:

• Women collectors, who gather the vast majority of shea-nut-exports/” title=”Nigeria Takes Bold Step: …s Export of Raw … to Boost … Industry”>raw nuts, being compelled to sell only within local markets,
• Local processors becoming the exclusive buyers, resulting in a monopsony where one buyer dominates many sellers,
• Processors acquiring nuts at artificially low prices, thereby inflating their profit margins,
• Processed Shea butter (either crude or semi-refined) being exported at international market prices, capturing most of the financial gains.

In effect, this export restriction does not generate new wealth but redistributes existing profits away from grassroots collectors toward processing intermediaries.

2. Diminished Negotiating Strength for Women and Smallholders

• In an open market scenario, women’s groups could engage in export agreements, form cooperatives, and benefit from pricing driven by global demand,
• The ban removes these opportunities, exposing women to exploitation by dominant processors,
• Women bear the brunt of reduced prices, while processors enjoy secure, risk-free earnings.

This outcome runs counter to the objectives of empowering women and alleviating poverty. The current policy framework:

• Undermines the bargaining power of rural women, and
• Favors industrial processors who may not reinvest profits locally or operate transparently.

3. Insufficient Local Processing Infrastructure

• Nigeria hosts a limited number of large-scale industrial processors alongside numerous small-scale producers, yet collectively they can only handle about one-third of the nation’s Shea nut output annually,
• Most processors are small and medium enterprises (SMEs) with restricted capital, unable to finance large upfront purchases during peak harvest,
• Significant volumes of Shea nuts remain unprocessed domestically due to inadequate capacity, outdated technology, and lack of investment,
• Deficient processing and storage facilities lead to spoilage and considerable post-harvest losses,
• With production exceeding processing capacity, many farmers struggle to find buyers within the country, leaving a large portion of nuts unsold.

4. Absence of Assured Government Revenue

The current regulatory environment lacks effective measures to ensure that profits from processing are taxed, monitored, or redistributed for public welfare. Key concerns include:

• Processors potentially underreporting earnings or transferring profits offshore,
• Informal and SME processors evading tax responsibilities,
• The government receiving minimal fiscal returns without strong tax enforcement and compliance mechanisms.

Without policies to capture revenue, the government’s aspirations for economic growth remain largely theoretical-raising the question: growth for whose benefit?

5. Promotes Rent-Seeking Over Genuine Industrial Progress

• Guaranteed access to inexpensive raw materials due to the ban may reduce incentives for processors to invest in quality improvements, innovation, or capacity expansion,
• The market risks becoming stagnant and dominated by rent-seeking behaviors, characterized by:

• Low wages for collectors, • Limited innovation, • Focus on exports without fostering domestic industry development.

6. Policy Reversal: The Vulnerable Subsidize the Affluent

This approach results in a counterproductive scenario where:

• Rural women and small-scale farmers effectively subsidize the profits of processing companies,
• The government collects minimal taxes and provides insufficient support infrastructure.

This pattern echoes previous policy shortcomings in sectors like Cocoa, Cotton, and Groundnuts, where raw material producers remained impoverished despite Nigeria’s prominent role in global supply chains.

Recommended Government Actions

To ensure equitable distribution of value addition benefits, the government should urgently implement the following measures:

✅ 1. Enforce Fair Pricing Mechanisms

• Set a minimum price floor for Shea nuts linked to global market demand and currency fluctuations,
• Create price oversight committees including representatives from women’s cooperatives.

✅ 2. Impose Export Taxes on Processed Shea Products

• Introduce value-based export levies to ensure processors contribute fair taxes on profits,
• Allocate tax revenues to support rural women’s cooperatives, training programs, and equipment acquisition.

✅ 3. Strengthen Cooperative Structures

• Invest in women-led processing centers enabling them to handle, brand, and export Shea products independently, thereby retaining profits within local communities.

✅ 4. Implement a Gradual Transition Strategy

• Permit controlled raw Shea nut exports through licensed cooperatives while scaling up domestic processing capabilities,
• Only enforce export bans once sufficient local processing capacity is established.

Conclusion: An Unbalanced Ban Harms Those It Aims to Help

Although the export ban seeks to stimulate local industrial growth, its current implementation:

• Disrupts equilibrium within the Shea value chain,
• Diverts power and profits away from grassroots producers, and
• Yields negligible fiscal or trade benefits for the Nigerian government.

Rather than empowering vulnerable groups, the ban consolidates market control among a select few.

A just Shea policy must safeguard women’s interests, generate government revenue, and foster a competitive, fair local industry-without sacrificing one for the other.

The government should avoid enabling monopolistic cartels, as existing local industries already benefit from proximity and are effectively competing.

Investment in technology is essential to help women collectors store Shea nuts properly, reducing distress sales. Access to credit and support programs will empower women to engage in more profitable segments of the value chain.

Additionally, government efforts should focus on enhancing Shea nut quality and providing training on sustainable harvesting, storage, and local value addition.

Any proposed export restrictions must be carefully designed with respect for longstanding social customs, values, and rural economic realities, ensuring that commercial interests do not disproportionately favor a handful of local processors at the expense of the broader community.