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The Centre for the Promotion of Private Enterprise (CPPE) has raised concerns over the federal government’s temporary ban on raw shea nut exports, warning that the policy could damage livelihoods, undermine investor confidence and expose Nigerian exporters to legal and financial risks.
On August 26, President Bola Tinubu announced a six-month suspension on shea nut exports, citing the need to encourage local value addition and accelerate industrialisation.
But according to Muda Yusuf, chief executive officer of CPPE, the abrupt implementation has caused widespread disruptions across the shea nut value chain.
“Shea nut prices have fallen by over 30 percent since the ban, eroding incomes of farmers and aggregators. “Existing export contracts face potential default, exposing exporters to legal and reputational risks. Loan defaults loom large, as many exporters rely on bank financing for procurement and aggregation”, Yusuf said.
Yusuf acknowledged that local processing of shea nuts holds promise for job creation, foreign exchange earnings, and industrial growth. Nigeria, he noted, produces about 40 percent of the world’s shea nuts, making it a key player in the global market. However, he cautioned that policy missteps could reverse progress already made in boosting non-oil exports.
“Policy credibility is crucial,” he said. “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.”
The CPPE pointed out that Nigeria earned over $3 billion from non-oil exports in the first quarter of 2025 alone, progress that could be jeopardized by inconsistent policy signals. The ban, Yusuf added, threatens thousands of jobs across cultivation, aggregation, logistics, and trade.
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“The policy effectively penalizes primary producers to benefit processors, creating a zero-sum scenario rather than a shared-growth model,” he said.
To mitigate the fallout, CPPE urged the federal government to adopt a phased and consultative approach. Yusuf recommended clear timelines for phasing out raw shea nut exports, allowing businesses to adjust operations gradually.
“Permit fulfilment of existing export contracts to prevent defaults and maintain Nigeria’s credibility,” he advised. “Address structural challenges—power supply, logistics, infrastructure, financing—to enable processors to purchase raw materials at market prices and still compete internationally.”
He also called for regular dialogue platforms involving farmers, processors, exporters, and financiers, stressing that policy predictability and transparency are essential for building investor trust.
“Farmers must receive fair market value for their produce to sustain rural livelihoods and encourage production. We must avoid policies that force primary producers to subsidize processors indirectly,” Yusuf said.
While backing the federal government’s goal of industrialisation, CPPE argued that reforms should be market-driven and inclusive, not sudden or punitive.
“Local value addition is vital for Nigeria’s economic diversification, but it should be implemented through a strategic, inclusive, and market-driven approach. “A phased transition with structural reforms, backed by stable policies and stakeholder engagement, will safeguard rural livelihoods, sustain non-oil export growth, and promote a competitive processing industry”, Yusuf explained.
