Understanding the Impact of the Shea Nut Export Ban
Elizabeth Nwankwo, Managing Director of Oklan Best and both the Oyo State Chapter and National Community Head of the National Shea Products Association of Nigeria, shares insights into the recent ban on raw shea nut exports. She discusses how this policy change has affected the industry and what steps are needed to transform Nigeria’s shea sector.
Why Did NASPAN React to the Ban?
The ban on raw shea nut exports was met with surprise by many stakeholders. Elizabeth explains that while the regulation is not inherently negative, it presents an opportunity for transformation. The term “raw” is misleading, as the shea nuts undergo extensive processing before reaching the export stage. Women pickers play a crucial role in this process, completing nearly half of the work through steps like picking, boiling, cracking, drying, and sorting.
Despite the initial shock, processors welcomed the move, expecting better access to raw materials through the domestic supply chain. However, the lack of a clear timeline created uncertainty. Elizabeth emphasizes the need for a 90-day window to allow exporters with verified contracts to proceed with processing.
What Could Stakeholders Have Accomplished in the First 52 Days?
During the first 52 days since the ban, stakeholders could have taken several critical actions. One key step would have been to call on all shea processing centers to declare their factory capacity. This would provide clarity on how much the existing infrastructure can handle and ensure that the shea nuts billed for export do not create bottlenecks.
Elizabeth also highlights the challenges of establishing new processing plants. It takes significant time to import equipment, design facilities, and complete installation. From negotiation to testing, the entire process could take over a year, making it impractical to rely on new plants in the short term.
Was the Ban Anticipated?
While Elizabeth acknowledges that the government has long been urged to support the industrialization of the shea value chain, the sudden ban was unexpected. For years, she and others have emphasized the need for patient, catalytic capital and blended finance to build the industry. Despite these efforts, the abrupt nature of the ban caught many off guard.
Challenges Faced by Shea Operators
Many government officials fail to recognize the true value of the shea sector. When they do, they often disrupt those who are managing the system, which is unfair and unkind. Elizabeth has written multiple letters to the Oyo State Government, urging them to prioritize the shea industry. However, these calls have not always been heeded.
The Potential of Nigeria’s Shea Industry
Nigeria holds about 58% of the global shea nut supply, presenting a unique opportunity to lead the global shea industry. The country has the resources and responsibility to make this happen. Shea is a valuable resource that is often overlooked, even though it is used in products like chocolate and wafers as an alternative to cocoa butter.
Common Misconceptions About the Shea Industry
One common misconception is that people are unaware of the presence of shea in everyday products. Unlike cocoa beans, which require minimal processing before export, shea nuts go through numerous steps before reaching the market. This makes the shea industry more complex and labor-intensive.
Challenges of the Timing of the Ban
The timing of the ban was particularly challenging. The season was closing, and many exporters had already invested heavily in the market. Prices had risen significantly, and some businesses were holding large quantities in storage. The financial strain caused by the ban has put many at risk of defaulting on contracts.
Ghana handled its own ban differently, giving exporters until January to adjust. A similar approach in Nigeria could have prevented losses and protected the country’s reputation with foreign partners.
Short- and Long-Term Implications for Exporters
In the short term, the ban disrupted business operations, affecting the livelihoods of over eight million women farmers. Financial strain and the risk of contract defaults threaten Nigeria’s credibility in the global market. However, the ban could also accelerate the industrialization of the shea sector if managed carefully.
Risks of Enforcing the Ban Without Adjustments
Enforcing the ban without adjustments poses significant risks, including the loss of livelihoods. Some actors have resorted to smuggling goods through porous borders, undermining the formal export system. Elizabeth emphasizes the importance of maintaining a formal, recognized export system that supports the Geographical Indicator for Nigeria.
How Can the Government Industrialize the Local Shea Sector?
Elizabeth suggests the creation of an export commodity exchange for shea kernel after the temporary ban. This would help stabilize prices and provide a platform for fair trade. She also highlights the need for a waiver for this year, emphasizing that the goal is not to lift the ban but to manage the transition effectively.
The Economic Potential of a Value-Added Shea Sector
A value-added shea sector could significantly boost Nigeria’s wealth. By-products such as fertilizers and black soap offer additional income streams. The global shea market is valued at around $6.5 billion, yet Nigeria’s share is less than 1%. This underscores the importance of investing in the sector to unlock its full potential.
