Shea nut export ban hurting farmers’ livelihoods, investor confidence

Nigeria’s sudden ban on raw shea nut exports is hurting farmers, exporters and investors, according to a new policy brief from the Centre for the Promotion of Private Enterprise (CPPE), which urged the government to adopt a phased approach.

According to the brief released on Sunday by the CPPE chief executive, Muda Yusuf, the ban was introduced without consultation and has triggered sharp disruptions in the supply chain.

Shea nut prices have fallen more than 30 per cent since the measure took effect, eroding the incomes of farmers and aggregators. Exporters are facing possible defaults on contracts and looming loan repayments, while thousands of jobs in cultivation, logistics and trade are under threat.

President Bola Tinubu, on 26 August, announced the temporary suspension of the export of shea nuts. The ban, which is with immediate effect, is subject to review on expiration and specifically aimed at boosting Nigeria’s shea value chain to generate around $300 million annually in the short term.

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Nigeria accounts for about 40 per cent of global shea nut output, and officials argue that value addition at home could generate jobs, foreign exchange and industrial growth.

“Sudden bans on exports with immediate effect introduce uncertainty, heighten risk, and undermine investor confidence,” said Mr Yusuf. “The policy effectively penalises primary producers to benefit processors, creating a zero-sum scenario rather than a shared-growth model.”

The think tank warned that abrupt policy shifts send “negative signals to investors” and could reverse gains in non-oil exports, which exceeded $3 billion in the first quarter of 2025.

CPPE recommended that the government allow companies to honour existing export contracts, introduce clear timelines for phasing out raw exports, and address structural constraints such as power supply, logistics and financing that make local processors less competitive.

It also urged the government to “Introduce clear timelines for phasing out raw exports, allowing businesses to adjust operations; Permit fulfilment of existing export contracts to prevent defaults and maintain Nigeria’s credibility; address structural challenges, power supply, logistics, infrastructure, and financing, to enable processors to purchase raw materials at market prices and still compete internationally.”

It also recommended safeguarding farmers’ incomes by ensuring they receive fair market value for their produce, while avoiding policies that shift costs onto them. CPPE urged regular consultation with farmers, processors, exporters and financiers to improve transparency and build investor trust.

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Nigeria has long struggled to balance the push for industrialisation with the need to protect smallholder farmers who dominate the country’s agricultural sector. Previous sudden restrictions, such as bans on maize and rice imports, have drawn criticism for destabilising markets and deterring investment.

Mr Yusuf said Nigeria’s industrial policy should be “strategic, inclusive, and market-friendly,” adding that processors should thrive on competitiveness rather than on “a regime of subsidised raw materials.”

The CPPE brief called for regular engagement with farmers, exporters and financiers to build trust and policy stability.