September 8, 2025

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NPNEN Reacts to Federal Government’s Ban on Raw Shea Exports: Calls for Strategic, Data-Driven Policy to Avoid Collateral Damage

Abuja, Nigeria – [Date] – The Network of Practicing Non-Oil Exporters of Nigeria (NPNEN) expresses profound concern over the Federal Government’s recent imposition of an outright ban on the export of raw shea products. While we unequivocally support the strategic goal of promoting local value addition and industrialization, the current approach is ill-timed, poorly informed, and risks causing severe economic damage to a sector dominated by rural women and smallholders, while doing little to achieve its intended objective.

As key stakeholders in the non-oil export sector, we have long advocated for policies that grow local industries, empower communities, and attract investment. However, bans are not strategies. This abrupt prohibition destabilizes livelihoods, undermines Nigeria’s credibility in international trade, and fails to address the real bottlenecks stifling the shea value chain.

The Data Behind Our Concern: Why This Ban Misses the Mark

Nigeria is the global leader in raw shea nut production, accounting for nearly 43% of the global supply with an annual production of approximately 350,000 MT—a figure with the potential to reach 900,000 MT. Despite this dominance, Nigeria is conspicuously absent from the list of top shea butter exporting nations, which is led by the United States, Thailand, and Italy.

This anomaly, reminiscent of the cocoa value chain, is not due to a lack of raw materials but to critical structural deficiencies:

1. Massive Unused Processing Capacity: Nigeria has an installed processing capacity of 160,000 MT. However, due to challenges like high energy costs, poor infrastructure, lack of affordable finance, and weak logistics, processors only utilize 35-50% of this capacity (56,000–80,000 MT annually). The real issue is not a shortage of nuts for processors, but their inability to operate profitably at scale.
2. The 180,000 MT Question: Of Nigeria’s 350,000 MT production, an estimated 90,000 MT is informally exported as raw nuts. The remaining balance of over 180,000 MT remains unaccounted for—likely wasted, poorly stored, or traded unrecorded. A ban does nothing to address this massive post-harvest loss.
3. The Absorption Fallacy: Even if the entire 90,000 MT of informal exports were magically diverted to domestic processors tomorrow, the current operational system lacks the capacity to absorb it. This ban, therefore, targets a symptom (raw nut leakage) while ignoring the disease (structural inefficiencies).

Key Risks and Unintended Consequences

• Livelihood Destruction: Announced mid-trading season, this ban traps exporters with signed contracts and advance payments. It risks crashing farmgate prices, directly harming the rural women collectors and farmers who form the backbone of this sector.
• Investment Deterrence: Such sudden, unilateral policy shifts signal high risk to investors, both local and foreign, who seek stability and predictability.
• Increased Smuggling: Without viable domestic off-takers operating at capacity, this policy will incentivize smuggling across porous borders, further undermining formal trade and government revenue.
• Credibility Erosion: It contradicts Nigeria’s commitments to regional and continental trade agreements like ECOWAS and AfCFTA, damaging our reputation as a reliable trading partner.

Our Position

• We Support Value Addition: We are committed to building robust local industries that process raw materials. However, this must be driven by enabling policies, not punitive bans.
• We Reject Sudden Bans: Industrialization cannot be decreed by prohibition. It requires a phased, consultative, and evidence-based roadmap.
• We Call for Policy Coordination: The Ministries of Trade, Agriculture, and relevant agencies must collaborate with private sector stakeholders to design solutions that are inclusive, sustainable, and enforceable.

The Way Forward: A Call for a Strategic Policy Mix

NPNEN urgently calls on the Federal Government to:

1. Immediately reverse the blanket ban and replace it with a phased restriction explicitly tied to measurable milestones in domestic processing capacity utilization and growth.
2. Convene a genuine stakeholder consultation involving exporters, processors, investors, and women-led cooperatives to co-create a viable strategy.
3. Address the Real Bottlenecks: Implement targeted incentives for processors, including tax breaks, power subsidies, and access to affordable credit. Invest in critical storage and aggregation infrastructure to reduce post-harvest losses.
4. Empower the Core Producers: Support women-led cooperatives to ensure they capture more value from the chain, mirroring successful models like the dairy cooperatives in the Netherlands.
5. Align with Regional Commitments: Ensure all trade measures are consistent with Nigeria’s obligations under ECOWAS and AfCFTA.

The new 30,000 MT facility in Mokwa is a step in the right direction, but it alone cannot absorb the existing surplus, let alone future production growth. Without the right enabling environment, SMEs and processors will struggle, and the potential of this sector will remain unrealized.

NPNEN stands ready to work with the government to design a strategic roadmap that truly strengthens the shea sector, protects livelihoods, attracts investment, and positions Nigeria as the global leader in value-added shea products it deserves to be.

Signed,

Network of Practicing Non-Oil Exporters of Nigeria (NPNEN)

For more information, please contact:
NPNEN Secretariat.

 

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