The Centre for the Promotion of Private Enterprise (CPPE), a prominent economic think tank, has expressed serious concerns regarding the Nigerian government’s recent decision to impose a ban on the export of raw shea nuts.
On August 26, 2025, President Bola Tinubu announced a six-month suspension on the exportation of raw shea nuts, aiming to bolster domestic processing industries.
According to Abubakar Kyari, the Minister of Agriculture and Food Security, this measure is designed to ensure a steady supply for local processors, generate employment opportunities, and safeguard a value chain predominantly supported by women, who make up 95% of shea nut pickers.
He further explained that despite Nigeria producing nearly 40% of the world’s shea nuts, the country currently captures less than 1% of the $6.5 billion global market, highlighting the need to correct this imbalance through enhanced local value addition.
In response to the ban, CPPE’s CEO, Muda Yusuf, issued a statement on September 14, 2025, warning that the abrupt enforcement of this policy has caused significant disruptions across the shea nut supply chain, adversely impacting farmers’ earnings.
While acknowledging the government’s objective to accelerate industrialisation and promote domestic value addition as commendable, Yusuf emphasized that the immediate implementation has led to severe challenges for all stakeholders involved, including farmers, aggregators, exporters, and logistics operators.
“Since the ban took effect, shea nut prices have plummeted by over 30%, severely diminishing the income of farmers and middlemen,” he noted.
“Moreover, exporters face the risk of breaching existing contracts, which could result in legal complications and damage to their reputations.”
He also highlighted the looming threat of loan defaults, as many exporters depend heavily on bank loans to finance procurement and aggregation activities.
Yusuf reiterated that while the ban aims to foster local processing and support Nigeria’s industrial growth, its sudden imposition has destabilized the shea nut ecosystem.
He advocated for a gradual, consultative approach to implementing such policies, which would help maintain investor confidence, protect the progress made in non-oil exports, and promote inclusive, market-driven development.
Noting Nigeria’s dominant position as the producer of approximately 40% of the world’s shea nuts, Yusuf stressed the country’s vast potential to expand its footprint in the international market through enhanced processing capabilities.
“Advancing up the value chain by increasing local processing can generate employment, boost foreign exchange earnings, and strengthen industrial capacity,” he said.
However, he cautioned that policy unpredictability-such as sudden export bans-creates uncertainty, elevates risks, and undermines investor trust, which could deter investment not only in shea nuts but across the broader non-oil export sector.
Yusuf pointed out that abrupt policy changes send negative signals to investors, who may interpret them as indicators of heightened regulatory risk in Nigeria.
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“The gains achieved in non-oil exports, which exceeded $3 billion in the first quarter of 2025, risk being reversed if investor confidence wanes,” the CPPE warned.
“Thousands of jobs linked to shea nut farming, aggregation, transportation, and trade are under threat due to this ban.”
“This policy disproportionately disadvantages primary producers to the benefit of processors, creating a zero-sum dynamic rather than fostering shared economic growth.”
Yusuf urged the government to establish clear timelines for phasing out raw shea nut exports, allowing businesses sufficient time to adapt their operations accordingly.
“Existing export contracts should be honored to avoid defaults and preserve Nigeria’s credibility in international markets,” he advised.
He also called for addressing fundamental structural issues such as power supply, transportation infrastructure, and access to financing, which are critical for processors to competitively source raw materials at market prices.
“Encouraging innovation and operational efficiency in processing is preferable to relying on artificially suppressed input costs,” Yusuf added.
Furthermore, he emphasized the importance of ensuring that farmers receive fair compensation for their produce to sustain rural livelihoods and incentivize continued production.
“Policies should not indirectly force primary producers to subsidize processors. Establishing regular consultative forums involving farmers, processors, exporters, and financiers will enhance policy transparency and predictability, thereby strengthening investor confidence,” he concluded.
Yusuf underscored that while local value addition is essential for Nigeria’s economic diversification, it must be pursued through a well-planned, inclusive, and market-oriented strategy.
In closing, he remarked, “A phased transition supported by comprehensive structural reforms will protect rural incomes, sustain growth in non-oil exports, and ensure processors compete based on efficiency rather than subsidized raw materials.
“Stable policies and active stakeholder engagement are vital to achieving mutually beneficial outcomes for farmers, processors, and the wider economy.”
