• Operators in limbo as ministers disagree over policy direction
• Pro-industrialisation advocates push for backward integration
• Warehoused inventory rises as external interests join campaign
• Government forecloses unconditional export, reviews policy outcomes 

Ahead of the end of the six-month temporary export ban on shea nuts, the Federal Government is under intense pressure to reverse the policy and allow the multi-billion-naira market return to the status quo, The Guardian has learnt.

But pro-industrialisation advocates insist reversing the policy would undermine the government’s commitment to boosting local production and value retention while sending a wrong message on policy consistency.

The ban was a test case of the government’s move to boost local industrialisation, a reinvented policy thrust from which the new National Industrial Policy (NIP) and a bill seeking to stop the export of commodities with at least a 30 per cent value addition draw.

Anxiety is building ahead of the February 26 deadline. The apprehension is worsened by a cold war over the issue, with pro-industrialisation ministers mounting pressure on the presidency to extend the policy or make the ban permanent to give the market clarity on the government’s long-term position.

But another camp is seeking moderation to the policy, a possibility critics said would not advance the cause for an economy that harnesses its resources to create value and jobs but would amount to policy inconsistency.

Already, exporters are said to have warehoused thousands of metric tonnes awaiting the policy reversal for shipping.

But The Guardian learnt the government had foreclosed unconditional exports ab initio, suggesting no review would accommodate a free-for-all commodity export.

A total pivot, industrialisation advocates warned, would raise questions about the true intention of government, as a six-month window is inadequate to address the need for investment in processing.

Whereas the conflict of interest is understandable for a market that controls 40 per cent of the global supply of shea kernel, the contestation is heightened by what seems to be a disagreement between key government functionalities coordinating feedback on the success of the six-month export closure.

Relevant ministers serving under President Bola Tinubu’s cabinet are said to hold conflicting economic ideological stands on the issue – some pro-trade while others are seeking the renewal of the ban to support local industrialisation.

The position was played out at a stakeholders’ meeting held last week in Abuja to review the outcome of the ban and chart a sustainable course of action.

The Minister of State for Industry, John Enoh, and the Minister of Agriculture and Food Security, Abubakar Kyari, The Guardian learnt, want the ban retained, insisting that Nigeria cannot continue with the decades of economic slavery while the Minister of Trade, Trade and Investment, Dr Jumoke Oduwole, shares the sentiment of the growers that there could be an alternative to an abrupt export ban.

Some analysts had faulted the August export closure, which they described as an unnecessary market shock, saying a phased implementation would still increase local industrialisation without rattling the market.

But the proponents insisted that a radical departure from the past was necessary to end an era of massive job export in the name of trade, continuous starvation of local companies of feedstocks and increased value retention.

During a recent interview, Enoh said the six-month export ban was an eye-opener to the enormous value Nigeria can create with such a radical departure via a policy change from commodity trading to value creation.

The policy aligns with a current bill at the National Assembly that seeks to outlaw the export of commodities without at least 30 per cent value addition.

Until recently, the oil industry was stranded in a similar commodity export-and-value-import paradox. The former president of the African Development Bank (AfDB). Dr Akinwumi Adesina had described the practice, which accentuated the African economic dependency crisis, as the root crisis of poverty and unemployment.

Across Africa, countries export cocoa beans and import chocolates, export crude and import refined products, export cottons and import textiles, export iron ore and import steel. In the process, they export volumes and import value, a trade relation that has reduced the countries’ terms of trade and met their value shares to near zero.

A source close to Tinubu’s cabinet members in the eye of the storm told The Guardian that neither of the camps is wrong, but that the country’s medium to long-term objectives were important in reconciling the two extremes.

Another pro-industrialisation advocacy insists it is not entirely a binary issue, arguing that the government can find a middle course that could help the market to benefit from both ends.

The group is pushing an advocacy around a backward integration plan that could see the government handing over export licenses to firms that, through significant investment value creation, have demonstrated commitment to local processing of shea nuts into butters and other by-products for local consumption and export.

Shea nut export is a case study of Nigeria’s commodity-poor paradox. Whereas the country produces about 40 to 45 per cent of the global supply, the country is only able to capture one per cent of the total $6.5 billion market value.

Isyaku Rabiu, an executive of BUA Foods Plc, in an open letter to President Bola Tinubu shortly after the August ban, said only about 10 per cent of Nigeria’s yearly production, which is estimated at between 300,000 and 500,000 metric tonnes, is processed locally.

“Importantly, the implementation of the African Continental Free Trade Agreement (AfCFTA) creates a strategic platform for Nigeria to export shea butter and its derivatives across Africa tariff-free, positioning us as the continent’s hub for shea-based products. This not only enhances regional trade but also strengthens Nigeria’s leadership role in driving intra-African commerce under the Renewed Hope Agenda.

“If Nigeria harnesses this potential by investing in processing, refining, and branded exports, the nation could capture a sizable share of this market while generating billions in non-oil foreign exchange inflows,” Rabiu wrote last year. Messages on whether these views are still relevant six months into the implementation were not responded to as of the time of filing this report.

Unrestrained export had kneecapped critical local industries that relied heavily on shea kernels, to less than 50 per cent capacity utilisation over the years, a situation that increased the challenge of unemployment in the country and had farmers bumped through extremely volatile prices, as is common with other commodity trades, which are often regarded as buyer markets.

As in the past year, the global beauty and cosmetics industry was projected to exceed $500 billion, with shea butter standing out as a core raw material for cream, lotions, soaps and haircare products – a huge market. Nigeria, a wholesale exporter of shea nuts until recently, could only play as a periphery.

In West Africa, Burkina Faso, Mali, Ivory Coast, Ghana and Togo previously implemented restrictive policies to halt the export of raw shea and boost local processing. But foreign countries, whose cosmetics markets are sustained by shea kernels from Nigeria and other West African countries, are not merely gazing at their navels in the face of the region’s pullback.

Two independent sources with significant knowledge on how the rising nationalist policies have distorted the global supply chain said foreign powers have intensified lobbying to force governments across the region to retreat.

Much of the pressure is coming from farmers with regular calls on the ministers who are relevant to the policy framework. There are arguments that the shock has established a new price equilibrium, leaving their growers struggling to recoup their costs.

At the policy’s onset, the price per kilogramme dropped from about N850 to N570 on average. As the market weans itself of the initial shock, prices rebound to about N1000, about 18 per cent above the pre-ban average price.