The Alliance for Economic Research and Ethics LTD/GTE has issued a strong call for clarification from the Nigerian government regarding its recent ban on the export of raw shea nuts.
In a strategic move aimed at maximising the potential of Nigeria’s shea industry, President Bola Ahmed Tinubu announced a six-month ban on the export of raw shea nuts. This bold decision, effective immediately, is designed to curb the export of unprocessed shea, encourage local processing, and position Nigeria to capture a larger share of the N10 trillion ($6.5 billion) global shea market.
Pinnacle Daily, in an exclusive analysis, had identified the informal cross-border trade of shea nuts as a longstanding issue, with over 90,000 metric tonnes of raw shea lost annually due to this trade.
Additionally, the establishment of local processing facilities requires significant investment in infrastructure, training, and technology.
In a statement released by Hon. Dele Kelvin Oye, Chairman of the Alliance for Economic Research & Ethics LTD/GTE, the group hailed as a positive step toward industrialisation, rural empowerment, and gender equality.
However, the Alliance is urging clearer communication and a phased implementation to avoid disruptions in the sector.
The Alliance commended the government’s initiative to industrialise Nigeria’s shea nut sector, recognising the potential to unlock significant value from a market estimated to be worth $6.6 billion globally.
According to the Alliance, this policy could help Nigeria transition from exporting raw shea nuts to processing them domestically, which would significantly boost the country’s position in the global market.
With Nigeria currently producing 69.8% of the world’s shea butter, the country stands to capture more value from its extensive production capacity.
A Strategic Step Toward Industrialization
The government’s policy, aimed at promoting local processing and value addition, aligns with President Bola Ahmed Tinubu’s broader industrialisation agenda, which seeks to integrate Nigeria into Africa’s regional value chains.
The policy promises to support rural communities where shea nut production is a key livelihood, particularly empowering women who make up the majority of workers in the sector.
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“The shift toward local processing and industrialisation of shea nuts is a critical step for Nigeria’s economic transformation,” said Oye. “By adding value domestically, Nigeria can significantly increase its revenue from shea exports, which could reach up to $700 million annually, according to industry projections.”
Caution Against Abrupt Policy Changes
Despite the potential benefits, the Alliance cautioned against a hasty implementation of the policy without proper consultation and a transition plan.
The group emphasised that immediate policy reversals could undermine existing investments and trade commitments, which could harm businesses involved in the shea industry.
“We recognise the importance of this policy, but it is crucial that it is rolled out with adequate preparation,” Oye added. “Immediate policy changes without clear communication could disrupt the livelihoods of many Nigerians who depend on shea exports. We urge the government to ensure that the policy is implemented in a way that allows businesses to adjust and thrive.”
The Alliance called for a clear communication strategy to inform stakeholders about how the policy will benefit them and provide details on financing, training, and technical support available to assist with the transition.
The Need for Phased Implementation
The Alliance advocates for a phased implementation of the ban, which would provide exporters, processors, and financial institutions with time to upgrade facilities, improve quality control, and meet new export standards.
This gradual approach would allow current contracts to be honoured while guiding the industry toward higher-value activities.
READ ALSO: Tinubu Suspends Raw Shea Exports, Urges Value Creation in Nigeria
“A staged timeline will help stakeholders prepare for the changes, ensuring that existing commitments are preserved,” Oye said. “This will also give local processors time to invest in the necessary infrastructure and workforce training to meet the demands of international markets.”
Government Support Critical for Success
The Alliance also stressed the importance of government intervention during the transition period. With Nigeria’s limited shea processing capacity, there is a risk of supply gaps and capacity constraints.
The group suggested that the government step in to purchase unsold raw shea nuts during the transition phase, selling them to willing processors. This would help avoid market disruptions and ensure that all raw shea produced is utilised effectively.
In addition to supporting processors, the Alliance emphasised the need for robust transition support to prevent smuggling, enhance compliance, and improve revenue collection.
Global Trade Relations and Lessons from Other Nations
For Nigeria to succeed in the shea nut industrialisation drive, maintaining a strong presence in global markets is vital. The Alliance noted that the government must ensure that bilateral trade relationships remain stable, particularly with countries seeking predictable and stable policy environments.
The Alliance also pointed to successful case studies from countries like Ghana, Indonesia, and Malaysia, which have implemented similar policies in a phased and consultative manner.
Ghana’s approach, which allowed producers to gradually adjust and upgrade, was cited as a model for Nigeria.
“We urge the Nigerian government to learn from these global examples by providing a clear timeline and actionable targets to help the industry transition smoothly,” Oye concluded.
A Sustainable Future for Nigeria’s Shea Industry
The Alliance believes that Nigeria’s shea industry has immense potential to contribute significantly to the economy.
However, achieving these goals requires robust planning, stakeholder cooperation, and a careful, phased approach to policy implementation.
The release noted that as Nigeria moves toward industrialising its shea nut sector, the Alliance is committed to collaborating with the government and industry partners to create a sustainable, thriving sector that benefits all Nigerians.
Through strategic investments, capacity building, and clear policy guidance, the shea industry could become a cornerstone of Nigeria’s industrialisation efforts, the Alliance added.
Sunday Michael Ogwu is a Nigerian journalist and editor of Pinnacle Daily. He is known for his work in business and economic reporting. He has held editorial roles in prominent Nigerian media outlets, where he has focused on economic policy, financial markets, and developmental issues affecting Nigeria and Africa more broadly.
