Nigeria Extends Shea Export Ban to Boost Local Processing

AFRICAN BUSINESS AND ECONOMYMarch 2, 2026 at 1:32 PM UTC

TLDR

Nigeria extends ban on raw shea nut exports for another year to boost domestic processing and value retention.
Exported shea nuts often raw, but processed shea butter has much higher market value in food, cosmetics, and pharmaceutical industries.
New framework requires all shea exports to go through Nigeria Commodity Exchange, aiming to finance new processing capacity for higher value in global market.

Nigeria has extended its ban on the export of raw shea nuts for another year, reinforcing its push to expand domestic processing and retain more value from one of its key agricultural commodities.

The measure, effective from Feb. 26, 2026, to Feb. 25, 2027, prolongs an initial six-month moratorium introduced in August 2025. Authorities say the goal is to reposition Nigeria in higher-value segments of the shea industry under the government’s industrialization agenda.

Nigeria accounts for close to 40% of global shea supply, with annual output estimated between 350,000 and 500,000 tons. Yet it captures only about 1% of the global shea market, valued at $6.5 billion. Most exports consist of raw nuts, while processed shea butter, used in food, cosmetics and pharmaceuticals, can sell for 10 to 20 times more.

Under the new framework, all shea exports must pass through the Nigeria Commodity Exchange. Exemptions allowing direct shipment of raw nuts have been removed. The government also plans to use the Nigeria Enterprise Support Scheme to finance new processing capacity.

The policy has already affected prices. Since the initial announcement in 2025, nut prices have fallen by about one-third. At the end of the harvest season in December, shea nuts traded near 850 naira per kilogram.

Industry groups had requested a grace period during the first suspension, citing contract losses. The government declined.

Other West African producers, including Burkina Faso, Mali, Ivory Coast and Togo, have adopted similar measures.

Key Takeaways

Nigeria’s decision reflects a broader strategy among West African producers to capture more value from commodities long exported in raw form. The region dominates global shea output, but most processing and branding occur abroad, particularly in Europe and Asia. Shea butter is used as a cocoa butter equivalent in chocolate and as an ingredient in global cosmetics brands. Multinationals such as Bunge Loders Croklaan and AAK source from West Africa and operate processing facilities in the region. However, much of the higher-margin refining and formulation still takes place outside producer countries. Export bans can shift incentives toward local investment, but they also create short-term strain. Farmers and intermediaries face lower prices when export channels narrow. Processing capacity, electricity supply and logistics infrastructure remain constraints. If Nigeria succeeds in expanding formal processing plants and improving traceability, it could increase export earnings and create jobs. If capacity lags, the policy risks depressing farm incomes without generating sufficient industrial gains. The outcome will depend on financing, infrastructure and coordination across the value chain.

Nigeria