Stakeholders seek increased share of $6.5 billion global shea butter market

Stakeholders are calling for urgent reforms to enable Nigeria capture a larger share of the estimated $6.5 billion global shea butter market, as concerns mount that the country’s dominance in production has yet to translate into meaningful industrial and export earnings.

According to data from the Global Shea Alliance, Nigeria accounts for nearly 40 percent of the world’s shea nut supply but earns less than one percent of the total value generated across the global shea economy — a gap experts describe as one of the most persistent structural failures in the country’s agricultural export system.

Nigeria’s position as one of the world’s most important exporters of shea products is under fresh scrutiny, as industry stakeholders warn that a prolonged export ban on shea nuts has triggered market losses and weakened the country’s competitiveness in the global value chain.

Chief Executive Officer, Produce Export Development, Adetiloye Aiyeola, said the restriction has significantly backfired on the economy, with exporters losing long-standing buyers and struggling to transition into new markets.

“We are losing a lot from the ban. Nigeria was once one of the most important exporters of shea nuts, but the restriction has backfired on our economy in ways that were not fully anticipated,” he said.

The export restriction, introduced to encourage domestic processing and boost value addition, was expected to channel more raw shea nuts into local factories for conversion into shea butter and other derivatives. However, exporters argue that structural bottlenecks have limited the country’s ability to take full advantage of the policy.

According to Adetiloye, international buyers who previously relied on Nigerian shea nuts have shifted to alternative suppliers in West Africa and beyond.

“Over time, we have lost preferred buyers,” he said. “Several factories in Southeast Asia and other parts of the world have opened up, and we are gradually losing access to those markets.”

He explained that buyers of raw shea nuts are not necessarily the same as buyers of processed shea butter, creating a complex transition for exporters who were compelled to change their product focus.

“The clientele base is different,” Adetiloye noted. “The clients that buy shea nuts are completely different from those that require shea butter. Exporters now have to rebuild their sales pipelines and market access channels almost from scratch.”

Beyond market access, he pointed to deeper competitiveness challenges, including limited processing capacity, inefficiencies in logistics, and difficulties in transporting shea nuts to and from processing centres.

“There are issues we have not addressed — competitiveness, processing capacity, logistics and distribution networks,” he said. “We must ensure that products can move efficiently between aggregation centres, factories and ports.”

Exporters who were previously shipping shea nuts, he added, are now facing bottlenecks in accessing sufficient raw materials for export as butter. The policy shift has created short-term disruptions that have yet to stabilise.

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“It is not good for us right now that the ban continues in its current form,” Adetiloye said. “There should be some easing of the restriction while we build the capacity required to process at scale.”

He emphasised that while value addition remains a commendable goal, the transition must be gradual and supported by investments in infrastructure and market development.

“You cannot abruptly shut off access to established international buyers without first ensuring that local processors are competitive and that exporters have secure alternative markets,” he said.

To mitigate the impact, industry groups and export promotion advocates are now working to help shea butter exporters secure new buyers.

“As much as possible, we are providing market access for exporters,” Adetiloye explained. “We are helping them find new buyers and markets for shea butter, especially those who have stopped exporting shea nuts and are trying to reposition.”

He warned that unless urgent steps are taken to rebuild confidence among international partners, Nigeria risks permanently ceding market share to competitors.

“The global shea industry is expanding, but markets do not wait. Once buyers establish supply chains elsewhere, it becomes harder to win them back,” he said.

For Nigeria to recapture lost ground, Adetiloye argued, policymakers must adopt a balanced approach that supports domestic value addition without undermining exporters’ ability to compete globally.

“We need a coordinated strategy — improve logistics, strengthen processing capacity, provide financing support and gradually ease restrictions,” he said. “Only then can we truly reclaim the markets we have lost.”

Another stakeholder said Nigeria’s production dominance has not translated into industrial dominance.

“Nigeria produces nearly 40 percent of the world’s shea supply, a scale advantage few agricultural commodities can claim. Yet production dominance has not translated into industrial dominance,” an industry analyst said. “We capture less than one percent of that wealth because the real value extraction takes place outside our borders.”

Analysts noted that between 70 and 90 percent of Nigeria’s annual shea output is exported in raw form to refineries in Europe and Asia, where it is processed into higher-value derivatives such as shea stearin and shea olein. These refined fractions are key ingredients in cocoa butter equivalents used in chocolate manufacturing, as well as in the rapidly expanding global cosmetics and personal care industries.

Experts argued that the central challenge facing the sector lies not in production capacity but in weak domestic processing infrastructure and inconsistent industrial policy signals.

“The central issue is not just about what we grow, but what we do with it,” the analyst explained. “Industrial growth requires predictable policy direction. Nigeria has the opportunity to become more than a source of raw materials by transitioning into a leading exporter of finished shea-based products, but that transition must be supported by clear and consistent economic signals that build investor confidence.”

Data from the Food and Agriculture Organization indicate that manufactured agricultural exports command significantly higher and more stable long-term prices than raw commodities.

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Government-backed moves in recent months to restrict the export of raw shea nuts have triggered logistical bottlenecks in some producing states, leading to storage shortages and temporary trade slowdowns. However, stakeholders insist that these disruptions highlight deeper structural deficiencies in domestic processing capacity rather than policy failure.

“Industrial transitions are rarely smooth, but they are necessary for long-term maturity,” the analyst said. “The current glut of nuts in certain regions is a signal that our domestic processing capacity is not yet where it needs to be. Infrastructure rarely precedes demand; it follows it.”

With global demand for clean beauty products and cocoa butter equivalents on the rise, stakeholders believe Nigeria stands at a pivotal moment to move up the value chain and retain more of the wealth generated by its natural resources.

Last year, on August 26, 2025, the Federal Government announced a six-month temporary ban on the export of raw shea nuts as part of efforts to strengthen domestic industrial capacity. With 350,000 metric tonnes produced annually, the country aims to capture more of the $6.5 billion global market and generate $300 million in immediate value.

President Bola Tinubu said the policy supports diversification and rural growth. With women making up most of the shea workforce, the move could create jobs and raise incomes.

The Minister of Industry, Trade and Investment, Jumoke Oduwole, recently assured stakeholders in Nigeria’s shea nut industry that the government would conduct a comprehensive review of the six-month export ban, citing concerns over its impact on local producers, exporters, and foreign exchange earnings.

Speaking earlier this week at the launch of the Nigeria Industrial Policy 2025, Minister of State for Industry, Trade and Investment, John Enoh, described the move as bold but necessary.

“In August 2025, Mr President took a difficult but necessary decision to prohibit the export of raw shea nuts. At the time, many doubted the wisdom of that decision. But leadership is not measured by convenience; leadership is measured by conviction.”

However, in a new policy shift, the ministry said it would provide an objective briefing to President Bola Tinubu after concluding consultations with stakeholders across Nigeria’s shea value chain. The outcome of the assessment is expected to guide the Federal Government’s decision on whether to extend the ban on raw shea nut exports immediately or defer further action.