SHEA collection makes contribution to the total income of rural households belonging to different economic groups. Also, it quantifies the involvement of women in Shea nuts and fruits collection and processing.

Shea nut collection provides women collectors opportunity for upward economic mobility, women account for 90% of Shea nut collection and are at the lowest end of the value chain.

In Africa, the unique experience of each of the 16 million rural women who make a living from Shea nut inspires us more and more every day. Shea is an important crop, both economically and socially. It employs 4 million women for export and generates approximately USD 600 million a year in income at the community level in West Africa. At the household level, Shea accounts for up to 12% of household income and up to 32% of cash available, which is earned during the lean season. Moreover, Shea nut collection and processing were found to provide a valuable source of cash income to female household members who otherwise have very few income possibilities.

Shea nut collection provides economic resilience in term of income, assets and savings; Social resilience in form of women decision makeup at home. It also provides employment, medicinal benefits and nutrition.

Shea is crucial for rural women families and their livelihoods and for their generation. Shea collection and processing is a way for households to diversify their livelihood strategy and decrease their vulnerability to food insecurity and climate variability.

1. Value Redistribution Without Equity

The blanket ban on raw shea nut exports creates an artificial market structure in which:

• Women pickers (who collect 90%+ of raw nuts) are forced to sell locally,
• Local processors become the sole buyers, creating a monopsony (one buyer, many sellers),
• Processors purchase at artificially suppressed prices, increasing their margins,
• They export processed shea butter (crude or semi-refined) at global prices—capturing the bulk of the profit.

In essence, the export ban does not create new wealth—it reallocates existing wealth away from the grassroots to the processing middlemen.

2. Women and Smallholders Lose Bargaining Power

• In the open market, women groups could negotiate export contracts, participate in cooperatives, or benefit from global demand-driven pricing.
• Under a ban, that freedom is removed, leaving them vulnerable to exploitation by dominant processors.
• They bear the economic shock of lower prices while processors enjoy risk-free profits.

This contradicts the intended goals of gender empowerment and poverty alleviation. As currently designed, the ban:

• Weakens rural women’s negotiating power, and
• Benefits industrial processors, who may not reinvest profits locally or transparently.

3. Weak Local Processing Capacity

• While Nigeria has a few industrial-scale processors and many small cottage-level producers, these facilities together can only process a hundred of thousands of metric tons of shea nuts annually which is 1/3^rd of total shea nut production.
• The majority of local processors are small- to medium-sized enterprises (SMEs) with limited capital. They cannot raise enough funds to buy such massive volumes upfront.
• Purchasing shea nuts requires huge upfront payments during harvest season, when supply peaks.
• Much of the harvested shea is left unprocessed domestically because factories lack the capacity, technology, and investment needed to handle it.
• The absence of robust domestic processing and storage infrastructure results in spoilage and significant post-harvest losses.
• With Nigeria producing far more shea than its industries can absorb, farmers are left without sufficient domestic buyers, forcing a substantial portion of nuts to remain unsold.

4. No Guarantee of Government Revenue

The current policy framework lacks mechanisms to ensure that processors’ profits are taxed, regulated, or redistributed for public benefit. Key risks:

• Processors may under-declare profits or shift revenue offshore,
• Informal and SME processors might avoid tax obligations entirely,
• The government will gain little or no fiscal benefit unless tied to robust tax and compliance systems.

Without revenue capture policies, the government’s goal of economic growth becomes an illusion—growth for whom?

5. Encourages Rent-Seeking, Not Industrial Transformation

• With guaranteed raw material access at cheap prices (due to the ban), some processors may lack incentive to invest in quality, innovation, or scaling capacity.
• The market becomes uncompetitive and prone to rent-seeking behaviour:

o Low pay to pickers, o Minimal innovation, o Export-focused without domestic development benefits.

6. Policy Inversion: The Poor Subsidizing the Rich

This policy results in the reverse of inclusive growth:

• Rural women and poor smallholders subsidize the profits of processors,
• Meanwhile, government collects minimal tax and provides little support infrastructure.

These risks replicating past policy failures seen in Cocoa, Cotton, and Groundnut sectors, where:

• Raw material producers remained poor, despite Nigeria’s global role in supply chains.

What the Government Must Do Instead

To ensure that value addition benefits are shared, the government must urgently:

✅ 1. Mandate Fair Pricing

• Require a minimum floor price for shea nuts, tied to global demand and currency valuation.
• Establish price monitoring boards with women’s cooperatives as stakeholders.

✅ 2. Tax Processor Exports

• Introduce value-based export taxes on processed shea products, ensuring profits are taxed.
• Use collected revenue to fund rural women’s cooperatives, training, and equipment.

✅ 3. Build Cooperative Power

• Direct funds to build women-led processing hubs, so women can process, brand, and export their own products—keeping profits local. ✅ 4. Create a Phased Transition
• Allow controlled raw export through licensed cooperatives while local processing capacity is scaled.
• Ban should come after capacity is proven, not before.

Conclusion: A Ban Without Balance Hurts the Wrong People

While the export ban intends to drive local industrial growth, in its current form, it:

• Creates imbalance in the shea value chain,
• Shifts power and profit away from the grassroots, and
• Delivers little measurable benefit to the Nigerian government in tax or trade terms.

Instead of empowering the vulnerable, the ban consolidates market power into the hands of a few.

A fair shea policy must protect women, generate state revenue, and build competitive, equitable local industry. Not one at the expense of the others.

Government is requested not to fall for developing such monopoly cartels as the local industries already having advantage of local presence and are successfully competing.

Need is also to invest in technology to enable women collectors to store the product and reduce distress sale. Access to loans and programs to support women to acquire technology would enable them to seize the more profitable segments of value chain.

Government also needs to focus on improving quality of Shea nuts and provide training to women collectors for sustainable harvesting, storage and local value addition.

Any proposed ban needs to be carefully thought in a holistic manner, giving due consideration to centuries old prevalent social customs, values, practices and rural economics, and in doing so commercial interests should be last priority which is benefiting only 2-3 local processors in creating abusive monopoly.