Globally, 40% of raw shea nut produced is from Nigeria. However, Nigeria receives a relatively measly 1% of the global revenue. The global value which is at $6.5 billion at the moment, it is to reach $9 billion by 2030. This might seem huge, but Nigerians do not partake in the benefits because they do not get their fair share.
Nigeria is clearly punching below its weight and attracting next to nothing in income when it is the most important source of the raw product. This calls for attention, hence the need for the ban in the first place. Initially for 6 months, but has long been extended by a year.
All export waivers regarding raw shea nut have been removed. Making it possible to only export according to the guidelines of the Nigerian Commodity Exchange (NCX) and not directly and only the excess that cannot be processed within Nigeria.
Read also: Tinubu extends shea nut export ban by one year
The Object of the Ban
The export ban is done to retain value for Nigerians by ensuring value addition across the value chain within the country, boost Nigeria’s processing capacity and guide Nigeria to the industrialization of its agricultural sector.
All of this in a bid to process the raw shea nut to at least shea butter increasing its value 10 to 20-fold. While processing to shea butter from raw shea can be done in the short-run, going up the value chain, however, might be herculean requiring more time and more sophisticated investments.
The Downsides to the Export Ban
There is no enough processing capacity for the world’s 40% of shea nut to be transformed to shea butter, oil and derivatives. This would mean less market for the producers as they are limited to the domestic market and consequently less revenue in the short run for the raw shea nut producers. Furthermore, domestic processors might be swamped and would pay extremely low price as it becomes a buyers’ market.
Other producers considering how the market has become, may resort to smuggling across borders to make more money and make ends meet.
Read also: Shea butter ban drives 5% surge in local processing – Report
In conclusion, while export might help compel value addition on raw shea nut, by itself, it is not sufficient to deliver the much-needed result. So, there is a need to stimulate credit into the sector; processing infrastructure and capacity-building; research and standards to make it attractive to the export market. That way, the government’s good intentions in ensuring industrialization of nation would not be futile.
