The Centre for the Promotion of Private Enterprise (CPPE) has called for a phased implementation of the shea nut ban to safeguard investors’ confidence.
Its managing director/chief executive officer, Muda Yusuf, made the call in a statement on Sunday, September 14.
“This brief argues for a phased, consultative transition framework to safeguard investor confidence, preserve hard-won gains in non-oil exports, and ensure inclusive, market-driven growth,” the renowned economist urged.
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He noted that the ban has created a severe disruption in the shea nut value chain, hurting farmers, aggregators, exporters, and logistics providers.
“The Federal Government’s six-month ban on raw shea nut exports is intended to accelerate domestic value addition and support Nigeria’s industrialisation drive.
“While the goal is laudable, the instantaneous implementation of the ban has created severe disruptions in the shea nut value chain—hurting farmers, aggregators, exporters, and logistics providers,” Yusuf said.
In context, the CPPE boss said Nigeria holds significant potential in the global shea nut market, accounting for an estimated 40 per cent of global production.
He said moving up the value chain through local processing could generate jobs, foreign exchange, and industrial capacity.
Yusuf, however, mentioned that policy credibility is crucial, as the 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.
Challenges being faced
Yusuf highlighted the key challenges, including market disruptions and price collapse, stating that shea nut prices have fallen by over 30 per cent since the ban, eroding the incomes of farmers and aggregators.
This is also making existing export contracts face potential default, exposing exporters to legal and reputational risks, as well as loan defaults looming large, as many exporters rely on bank financing for procurement and aggregation.
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Another key challenge is that investor confidence is at risk, explaining that abrupt policy shifts send negative signals to investors, who may perceive higher policy risk in Nigeria.
He said the progress made in non-oil exports — over $3 billion in the first quarter of 2025 — could be reversed if confidence declines.
Yusuf also noted employment and social impact as a third challenge, stating that the ban threatens thousands of jobs in cultivation, aggregation, logistics, and trade in sheanuts.
He added that the policy effectively penalises primary producers to benefit processors, creating a zero-sum scenario rather than a shared-growth model.
What should be done
The CPPE boss urged that the policy recommendations could include the adoption of a phased transition approach.
This could be achieved by introducing clear timelines for phasing out raw exports, allowing businesses to adjust operations, as well as permitting fulfilment of existing export contracts to prevent defaults and maintain Nigeria’s credibility.
Another recommendation is to enhance the competitiveness of local processing.
Yusuf said this includes addressing structural challenges — power supply, logistics, infrastructure, and financing — to enable processors to purchase raw materials at market prices and still compete internationally.
It also involves promoting innovation and efficiency in processing rather than reliance on artificially low input costs.
A third policy recommendation is to protect primary producers by ensuring farmers capture fair market value for their produce, sustaining rural livelihoods and incentivising production.
It also involves avoiding policies that force primary producers to subsidise processors indirectly.
Yusuf added that institutionalising stakeholder engagement could serve as another recommendation.
He urged the establishment of regular consultative platforms involving farmers, processors, exporters, and financiers and the improvement of policy predictability and transparency to build investor trust.
“Local value addition is a critical step toward Nigeria’s economic diversification, but it must be pursued in a way that is strategic, inclusive, and market-friendly.
“A phased transition — supported by structural reforms — will protect rural incomes, sustain non-oil export growth, and ensure that processors thrive on competitiveness rather than on a regime of subsidised raw materials,” he maintained.
He reiterated that policy stability and stakeholder engagement are essential to achieving a win-win outcome for farmers, processors, and the broader economy.
Pinnacle Daily earlier reported that experts have raised concerns over the ban, seeking urgent clarity on the policy implementation.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
