The Centre for the Promotion of Private Enterprise (CPPE) has faulted the instant ban placed on the export of raw shea nuts by the Federal Government.

The Centre said while the policy may have some positive effects in accelerating domestic value addition, the instantaneous implementation of the ban has created severe disruptions in the shea nut value chain—hurting farmers, aggregators, exporters, and logistics providers.

Recently, the Federal Government placed a six-month ban on raw shea nut exports to help promote domestic value addition and support Nigeria’s industrialisation drive.

The ban, which is with immediate effect, has been generating mixed reactions from farmers, exporters, and other stakeholders in the shea nut business.

In a position paper signed by its Chief Executive Officer, Dr. Muda Yusuf, and made available to our reporter on Sunday, CPPE said that while the goal is laudable, a phased, consultative transition framework to safeguard investor confidence, preserve hard-won gains in non-oil exports, and ensure inclusive, market-driven growth would achieve better results.

According to the document, titled ‘Managing Nigeria’s Shea Nut Export Ban: Balancing Value Addition with Economic Inclusion’, Nigeria holds significant potential in the global shea nut market, accounting for an estimated 40 per cent of global production. Moving up the value chain through local processing could generate jobs, foreign exchange, and industrial capacity.

“However, policy credibility is crucial: 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,” it said.

CPPE said since the announcement of the ban, shea nut prices have fallen by over 30 per cent, eroding the incomes of farmers and aggregators.

Additionally, it said existing export contracts face potential default, exposing exporters to legal and reputational risks, while loan defaults loom large, as many exporters rely on bank financing for procurement and aggregation.

The document read: “Abrupt policy shifts send negative signals to investors, who may perceive higher policy risk in Nigeria.

“The progress made in non-oil exports, over $3 billion in the first quarter of 2025, could be reversed if confidence declines.

“The ban threatens thousands of jobs in cultivation, aggregation, logistics, and trade in shea nuts.”
CPPE said the policy effectively penalises primary producers to benefit processors, creating a zero-sum scenario rather than a shared-growth model.

In its recommendations, CPPE called for the introduction of clear timelines for phasing out raw exports, allowing businesses to adjust operations, and for the government to permit fulfilment of existing export contracts to prevent defaults and maintain Nigeria’s credibility.

The Centre also stressed the need to address structural challenges such as power supply, logistics, infrastructure, as well as financing, to enable processors to purchase raw materials at market prices and still compete internationally.

Other recommendations by CPPE include the promotion of innovation and efficiency in processing rather than reliance on artificially low input costs, ensuring that farmers capture fair market value for their produce, sustaining rural livelihoods and incentivizing production, avoiding policies that force primary producers to subsidize processors indirectly, as well as establishing regular consultative platforms involving farmers, processors, exporters, and financiers, and improving policy predictability and transparency to build investor trust.

It said that 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. Policy stability and stakeholder engagement are essential to achieving a win-win outcome for farmers, processors, and the broader economy,” it said.