With Nigeria currently reputed as the world’s leading producer of shea nuts, the Nigerian Export Import Bank said it was ready to support the country to recover its lost capacity.
Of the estimated over 680,000 metric tons of shea nuts produced annually in West Africa, Nigeria accounts for over 370,000 metric tonnes, or 53 percent of the capacity, according to the Central Bank of Nigeria, CBN, and Oil Seeds Association of Nigeria.
Shea trees, which grow wildly throughout the country, are predominantly in 21 of the 36 states of the federation.
The central bank said about 56 per cent of the production of shea nuts are exported, and the balance are either consumed locally, smuggled out of the country, resulting in a loss of nearly N345 million every year.
With current global demand for shea butter projected to grow from about $10 billion to more than $30 billion per annum by 2020, acting Managing Director of NEXIM, Bashir Wali, said the bank sees an opportunity to fund investments to boost the country’s production capacity.
“NEXIM is interested in providing funding for increased proactive measures to reposition agricultural products, such as shea, as part of its non-oil export sector interventions in the agro-processing sub-sector,” Mr. Wali said.
Mr. Wali was speaking during the visit of the House of Representatives’ Committee on Banking & Currency to Ladgroup Limited in Ikenne, Ogun State.
Ladgroup is Nigeria’s leading indigenous conglomerate, with a 40,000 metric tons per annum state of the art Oil Mill Extraction factory, the largest shea nuts processing factory in Africa.
With approximately 600,000 tons of shea nuts collected each year, the NEXIM MD said if the industry’s full potentials were realized, it would serve as an important source of jobs and income to the country, particularly millions of poor and under-served communities.
“Available statistics say nearly two billion shea trees grow naturally on park lands in 21 African countries, stretching from Senegal to South Sudan, with more than 16 million women living in rural communities individually collecting the fresh fruits and the kernel they process to extract a healthy vegetable oil known as “shea butter” they sell to earn a living,” Mr. Wali said.
As a demonstration of the bank’s commitment to support the industry to grow, Mr. Wali said NEXIM Bank had in March 2015 approved about $5.8 million to Ladgroup Limited to set up a shea nut processing factory.
The facility, which covered equipment finance ($2.8 million) and working capital ($3million), helped the company to purchase and install a shea butter refining unit, a step down transformer and to augment its working capital base.
The factory is dedicated to sourcing and processing of shea nuts into shea butter for sale to both domestic and export markets.
Ladgroup said its target was on major European importing companies in the confectionary/ chocolate as well as cosmetics/pharmaceutical industries in Netherlands, Denmark, Sweden and UK, which have a combined import capacity of over 95,000 metric tons annually.
Besides Ladgroup Limited, NEXIM Bank also provided working capital for Shea butter processing to Karite Oil Limited (formerly Fagow Oil & Gas Nigeria Limited) in Akure, Ondo State, for the 22MT capacity shea butter processing plant.
The MD said NEXIM Bank’s interest in shea nuts processing for export was as a result of the very high demand for shea butter, coupled with the impressive potentials for foreign exchange revenue stream as well as massive job creation opportunity at various levels of its value chain.
Chairman of the House of Representatives Committee, Jones Onyereri, who acknowledged NEXIM Bank’s contributions to the development of the Nigerian non-oil export sector, said the current economic recession has opened Nigerians’ eyes to the immense opportunities in the country beyond oil and gas, especially in agriculture and solid minerals.
The Chairman of Ladgroup Limited, B. A. Onafowokan, noted NEXIM Bank’s commitment to government’s effort to diversify the country’s revenue base, especially through promotion of export-oriented investments in the non-oil sectors.
He said company planned to create about 300 direct and more than 600 indirect jobs as well as earn about $5million in the first year, and $100million in the next five years.
“In addition to its traditional uses, such as cosmetics, soap, moisturizer, oil, wax, ointments and candles, shea butter is commonly used in the production of cocoa butter equivalents or improvers. About five percent content, by weight, is allowed under European Union regulations in chocolate, other confectionaries and margarine, creating even larger international markets for shea products,” Mr. Onafowokan said.