President Bola Ahmed Tinubu recently approved a six-month temporary ban on exporting raw shea nut, which he claimed was to curb informal trade, boost local processing, and protect and grow Nigeria’s shea industry.
According to the statement from State House, the ban is subject to review on expiration and specifically aims to boost Nigeria’s shea value chain to generate around $300 million annually in the short term.
Speaking further on the directive, Vice President Kashim Shettima said the decision was not “an anti-trade policy” but a pro-value addition policy designed to secure raw materials for the country’s processing factories and enable industries to run at full capacity, thereby boosting rural income and jobs for Nigerians.
This follows the approval earlier in May this year of the Renewed Hope Nigeria First policy, which places Nigeria at the centre of all public procurement and business activity, with a strong emphasis on empowering local industries and reducing dependency on imports.
According to a 2023 Nigerian Export Promotion Council (NEPC) report, Africa produces about 1,760,600 tonnes of raw shea nuts annually. Nigeria and Mali are the largest producers of shea kernels in Africa.
In 2019, Nigeria produced more than 39 per cent of global shea nuts, and Mali produced almost 31 per cent.
The Minister of Agriculture and Food Security, Senator Abubakar Kyari, said Nigeria produces an estimated 350,000 metric tonnes of raw shea nuts annually, though its potential is nearly 900,000 metric tonnes.
Shea kernels and Shea Butter with Botanical name: Vitellaria paradoxa formerly called Butyrospermum parkii are produced across 25 states of the country, including the Federal Capital Territory (FCT), while commercial activities are concentrated in Niger, Kebbi and Kwara states.
They’re used for chocolate, pastries, and confectionery (as cocoa butter substitute), cosmetics and body creams, soaps, margarine, cooking oil, baking fat, candles, and pharmaceuticals.
Much as we commend this directive, we consider it too preemptive and more like putting the cart before the horse, taking into cognisance the absence of specialised local manufacturing firms to add value to the country’s abundant raw shea for exports.
Sadly, the government churns out policies and directives as one eats food. In fact, it won’t be out of place to say that Nigeria has some of the best policies in the world, but where it dithers is in implementing those policies.
The Nigerian Export Promotion Council ( NEPC) attributes the poor export quality of shea to, among other things, a lack of storage facilities for the kernel and butter, poor quality butter produced, a lack of modern processing technology, and poor infrastructural facilities like roads, electricity, and water.
Besides shea, Nigeria has significant export growth potential across a range of key food commodities, but it lacks key industries that add value.
The federal government should see how to address the seemingly intractable challenges facing the country’s industrialisation efforts.
Since 2020 till date, local industries have shut down while multinationals have exited and relocated their operations due to rising operation cost, currency volatility and economic challenges.
In recognition of this fundamental challenge, the nation is still hobbling with its membership and finding it difficult to harness the gains from the African Continental Free Trade Area (AfCFTA).
The AfCFTA, a high-ambition trade agreement founded in 2018 and commencing trade on January 1, 2021, seeks to create the world’s largest free trade area, one that integrates 1.3 billion people across 55 African countries with a combined GDP valued at over $2.6 trillion.
With what the AfCFTA guidelines and procedures entail, only states with a stronger manufacturing sector will experience significant economic growth.
The federal government’s inability to transform the primary/commodity-based economy into a secondary/manufacturing economy is a major reason the country will not benefit much from the AfCFTA.
The need to address Nigeria’s business environment challenges, particularly closing its huge infrastructure gap, especially power, and improving the general ease of doing business, has never been more compelling if it is to attain manufacturing status.
Experts elucidate that poor transport infrastructure costs a business owner in Nigeria more to transport goods from Lagos to Kano than it costs a Chinese business owner to transport the same goods from China to Lagos.
Unfortunately, with high logistics costs and high-power supply costs, manufacturers produce much more expensive goods that no country wants to buy.
Regardless, it is pertinent to stress that the policy, on its face value, is good, and we commend the government’s initiative in this direction. What is urgently required is the political will to pursue it to the point of viability. To that extent, the government should enhance those factors that make local manufacturing attractive, of which power and transportation infrastructure are key.
