By Alexander Ekemenah

On August 26, 2025, the Federal Government of Nigeria ordered a six-month immediate ban of raw Shea nut export.

In a press release signed by Mr. Stanley Nkwocha, Senior Special Assistant to The President on Media & Communications, Office of the Vice President, dated 26th August, 2025, the Presidency claimed that Nigeria’s shea value will generate $300m annually in short term with the ban on export of the product.

The ban, according to the press release is meant to “curb informal trade, boost local processing, protect and grow Nigeria’s shea industry”.

The ban, however, will be reviewed “on expiration and specifically aimed at boosting Nigeria’s shea value chain to generate around $300 million annually in the short term.”

Vice President Kashim Shettima who announced the President’s directive said that the decision “will transform Nigeria from an exporter of raw shea nut to a global supplier of refined shea butter, oil and other derivatives,” just as he said it is about industrialisation, rural transformation, gender empowerment and expanding Nigeria’s global trade footprint.”

However, in a reaction to the ban, Mr. Dele Kelvin Oye, Chairman of the Alliance for Economic Research and Ethics and past Chairman OPSN, past President of Nigerian Association of Chambers of Commerce Industry Mines and Agriculture in a press release dated September 5, 2025, stated that while the ban was commendable for the reasons canvassed by the Federal Government, there are still areas of concerns.

“The Alliance for Economic Research and Ethics commends the Nigerian government for its recent policy aimed at encouraging the processing and value addition of agricultural products, including shea nuts.

“We recognize the potential benefits of enhancing local processing capabilities and elevating Nigeria’s position in the global shea market.

“However, we express our strong concerns regarding the immediate six-month ban on the export of raw shea nuts, which poses significant risks to our industry and exporters.

“While the intent behind the ban is to secure raw materials for local processing and boost the shea value chain, the abrupt nature of this policy could jeopardize ongoing commitments made by numerous stakeholders within the Alliance trade networks.

“Many of our members are currently engaged in executing both local and international contracts, and the existing processing facilities in Nigeria lack the capacity to process the current output in a timely manner”, the press release stated.

Alliance for Economic Research and Ethics outlines the disadvantages of the immediate ban as follows:

1. Disruption of Existing Contracts: Many exporters have existing contracts, some of which involve advanced deposits running into millions of dollars. The sudden ban disrupts these agreements, potentially leading to legal disputes and financial losses.
2. Investment Risks: The immediacy of this policy may deter future investments in the shea processing sector. Investors seek stable and predictable policy environments. Current policies that reverse commitments without adequate notice undermine confidence in the Nigerian market.
3. Capacity Constraints: The local processing facilities do not currently have the infrastructure or capacity to handle the existing volume of shea nuts, which means that a ban on exports could lead to wastage of resources and lost income for farmers and exporters alike.
4. Job Losses: A sudden halt in exports jeopardizes jobs within the shea value chain. Exporters, processors, and farmers rely on the revenue generated from these exports to sustain their livelihoods.
5. Long-term Economic Impact: The ban fails to consider the broader implications for Nigeria’s economy. A well-thought-out policy should aim not only to enhance local processing but also to ensure that existing exporters can transition smoothly without incurring undue hardship.

Alliance for Economic Research and Ethics, therefore urged the government to reconsider the immediate ban and instead adopt a more gradual approach.

Alliance for Economic Research and Ethics recommends the following measures:

1. Extension of the Ban Period: Allow for a longer timeframe, such as two years, similar to the approach taken by Ghana. This will provide exporters and processors with the necessary time to adjust and invest in enhancing local processing capabilities.
2. Stakeholder Consultation: Engage with industry stakeholders, including exporters and processors, to develop a coordinated and comprehensive strategy that aligns with both local processing goals and the needs of existing businesses.
3. Capacity Building and Investment: Facilitate investments in processing infrastructure to ensure that local facilities can meet the demand for processing while minimizing disruptions to existing contracts.
4. Monitoring and Evaluation: Establish a framework for monitoring the impact of such policies, allowing for adjustments based on real-world feedback and outcomes.

The Alliance for Economic Research and Ethics believes in the potential of Nigeria’s shea industry and its capacity to contribute significantly to our economy.

The Alliance for Economic Research and Ethics is also of the view that “we must approach policy changes with caution and foresight, ensuring that the interests of all stakeholders are taken into account, while looking forward to collaborating with the government and industry partners to create a sustainable and thriving shea sector that benefits all Nigerians”.