Alliance urges clear FG Shea export policy to boost local industry

The Alliance for Economic Research and Ethics has urged the Federal Government to provide a clear transition plan and conduct sector-wide consultations before fully enforcing its ban on raw shea nut exports.

Chairman of the trade group, Dele Oye, emphasized that immediate policy reversals without adequate transition measures could disrupt ongoing investment plans, undermine exporter confidence, and threaten livelihoods across the shea value chain.

“We commend the government’s direction on Nigerian shea nut industrialization.

This approach encourages local processing and value addition in a sector with a potential $6.6bn annual value, driving industrialization, rural development, and women empowerment,” Oye said.

However, he cautioned that abrupt policy enforcement could destabilize existing operations.

“Without phased implementation and clear communication, investors and processors may face losses on ongoing local and international contracts.

A staged six-month transition is critical for capital recovery and operational ramp-up,” he added.

The Alliance highlighted the importance of a comprehensive government support framework, including financing options, workforce training, technical assistance, and upgrading local processing facilities.

Oye suggested that the government could purchase current raw output and unsold stock to maintain compliance, prevent smuggling, and support local processors—a move he described as both strategic and profitable.

Drawing lessons from countries such as Ghana, Malaysia, Indonesia, and India, Oye noted that consultative, phased approaches to policy shifts allowed producers to adjust, upgrade, and meet new industrial standards without abruptly terminating existing engagements.

“Success in Nigeria’s shea nut industrialization depends on mitigating risks of capacity constraints and supply gaps while sustaining international trade relations.

A clear, phased policy ensures the sector grows sustainably while aligning with global standards,” Oye explained.

The Alliance also called for explicit targets for processing capacity, quality standards, and export diversification in the transition plan.

“We believe in the enormous potential of Nigeria’s shea industry.

Policy changes should be guided by robust monitoring, stakeholder feedback, and multi-agency coordination to maximize benefits for all participants,” he said.

On August 26, 2025, the Nigerian government, under President Bola Tinubu, announced an immediate six-month ban on the export of raw shea nuts.

This policy aims to bolster domestic processing capabilities and enhance the country’s share in the global shea products market.

Despite producing approximately 40% of the world’s shea nuts, Nigeria currently captures less than 1% of the $6.5 billion global market for shea-based products .

The ban is intended to encourage local industries to process shea nuts into value-added products such as shea butter, which is widely used in cosmetics and skincare.

By retaining more raw materials domestically, the government seeks to stimulate economic growth, create jobs, and empower rural communities, particularly women who are heavily involved in the shea industry.

Analysts estimate that full industrialization of the sector could position Nigeria as a global leader in shea derivatives, expanding opportunities in cosmetics, confectionery, and pharmaceuticals.

By encouraging strategic, phased policy implementation, the Federal Government can protect existing investments, enhance global trade credibility, and stimulate local processing capacity.

Stakeholders emphasized that such measures would not only secure livelihoods but also reinforce Nigeria’s long-term economic resilience.

The call by the Alliance aligns with broader national efforts to promote value addition in agriculture, strengthen local industries, and ensure inclusive economic growth.

It underscores the importance of policy clarity, stakeholder engagement, and a commitment to long-term planning in achieving sustainable development objectives.