Nigeria has been at the forefront of an ambitious economic policy shift following the six‑month ban on raw shea nut exports imposed by the federal government in August 2025. The aim is to expand domestic value addition, boost local processing, and capture a larger share of the global multi‑billion‑dollar shea market — a sector where Nigeria produces nearly 40 % of the world’s raw shea supply but historically captures only about 1 % of the value‑added market.
For Oyo State entrepreneurs, especially those in the Oke Ogun shea belt, this national policy moment presents both a challenge and an opportunity. The state is rich in shea resources — often described locally as the heartland of shea butter production — yet the critical questions remain: How can the Oyo State Government leverage this comparative advantage to expand revenue, grow exports, and strengthen rural economies? What concrete strategies can unlock the economic potential of shea beyond raw commodity markets? This blog post explores those angles in depth.
Understanding the Shea Export Ban and Its Implications
In late August 2025, President Bola Ahmed Tinubu and Vice President Kashim Shettima announced an immediate six‑month ban on the export of raw shea nuts, a decision framed as pro‑value‑addition rather than anti‑trade.
The core objectives were:
Curb informal and unregulated cross‑border trade, which leads to loss of domestic supply.
Secure raw materials for local processors and boost industrial capacity utilisation.
Generate significant foreign exchange through the export of refined shea products, not raw nuts.
Create rural jobs and income opportunities, especially benefiting women who make up the bulk of pickers and processors.
Government estimates project that the policy could enable Nigeria to generate approximately $300 million annually in the short term and up to $3 billion by 2027 from refined products exported globally.
However, the policy has faced pushback from industry stakeholders, who argue that the processing capacity within Nigeria is currently insufficient to absorb all raw supply, leading to price volatility, reduced incomes for collectors, and potential losses from pre‑existing export contracts.
As the six‑month ban period ends in February 2026, the federal government is actively reviewing the policy, generating pressure from exporters, civil society, and pro‑industrialisation advocates to either lift the ban or implement a structured transition plan.
Why Oyo State Is Poised for Shea Industry Leadership
1. Abundant Natural Resources and Strategic Location
Oyo State — particularly the Oke Ogun region which includes towns like Shaki and Iseyin — sits geographically within the West African shea belt, an ecological zone where Vitellaria paradoxa (the shea tree) thrives.
This gives the state a natural endowment of raw materials that many other Nigerian states lack or have in smaller volumes. Studies show that shea trees are widely dispersed across Oke Ogun, and historically the region was a major supplier of shea products — including exports to neighbouring countries — before structural changes shifted labour away from the sector.
2. Large Rural Workforce with Shea Expertise
Research indicates that women dominate shea nut collection and processing, and many rural households in Atisbo, Saki East, and Saki West are deeply involved in the traditional production of shea butter.
Economic analyses reveal that shea butter production in Oke Ogun generates significant gross margins and net revenue for producers, highlighting the income‑generating potential of the industry for rural livelihoods.
However, most producers currently use traditional methods, which limits yields and quality and fails to meet international standards required for high‑value markets.
The Twin Challenge: Expand Revenue and Add Value
To leverage its shea resource advantage, Oyo State faces two key strategic challenges:
Challenge 1: Bridging the Value Chain Gap
Despite abundant raw shea supply, the processing capacity remains largely informal and under‑capitalised. Traditional extraction processes dominate, resulting in low quality and inconsistent export‑ready products.
To maximise export value, Oyo State must prioritise upgrading processing capacity and quality — from small‑scale village cooperatives to industrial‑grade refineries capable of producing export‑certified shea butter and derivative products.
Challenge 2: Aligning Policy with Market Realities
The federal export ban has underscored the tension between value‑addition policy goals and real‑world market readiness. Without sufficient local processing infrastructure, forcing all production into the domestic market can cause price collapses and income losses.
Oyo’s strategy must respond not just to federal policy but also to global market demand, which increasingly favours high‑quality shea products used in cosmetics, skincare, food, and pharmaceuticals.
How Oyo State Government Can Drive Revenue and Transformation
Below are practical and high‑impact strategies that could transform Oyo into a global shea industry powerhouse, while securing revenue and jobs for local entrepreneurs.
1. Build and Scale Processing Infrastructure
Establish Modern Processing Clusters: Partner with private investors and development agencies to build processing hubs equipped with mechanised presses, quality control laboratories, packaging facilities, and export compliance systems.
Public‑Private Partnerships: Leverage government support and incentives (e.g., tax breaks, infrastructure support) to attract investors from Nigeria’s diaspora and global markets into shea processing ventures.
These infrastructure investments would ensure that Oyo State retains more of the added value within its borders, rather than exporting raw kernels for refinement abroad. This step is fundamental for export‑ready products that can compete internationally.
2. Strengthen Quality, Standards, and Certification
Implement Quality Assurance Frameworks: Develop state‑level standards aligned with international norms for shea butter purity, processing hygiene, and packaging — ensuring that Oyo products meet EU, US, and global import requirements.
Enable Certification Support: Facilitate access to organic, fair trade, and cosmetic‑grade certifications, which increase product credibility and global market appeal.
This will also elevate the state’s brand identity and allow Oyo’s shea butter to command higher prices internationally.
3. Expand Access to Finance and Technology
Microfinance and Cooperative Lending: Support rural women’s cooperatives with credit access so they can acquire modern presses and storage solutions.
Technology Adoption Programs: Partner with agricultural research and extension agencies to introduce intermediate processing technologies, reducing manual labour and improving output quality.
Studies show that low adoption of improved technology is a barrier to tapping into premium markets — overcoming this will be transformative.
4. Develop Strategic Export Initiatives
Export Facilitation Office: Create a state‑level export facilitation unit that helps local companies with international market entry — handling export documentation, foreign marketing, trade show participation, and buyer linkage services.
Market Diversification Plans: Target growth regions for shea products in Europe, North America, and Asia — where demand for natural and sustainable ingredients is rising.
By positioning Oyo as a reliable export hub for value‑added shea products, the state can boost revenue beyond local sales.
5. Strengthen Rural Engagement and Inclusive Growth
Training and Skills Development: Launch mobile extension services and training programs for rural pickers, processors, and entrepreneurs.
Women Empowerment Initiatives: Specifically target women, who represent the core of shea nut collection and processing labour, with skills, tools, and financial inclusion programs.
These efforts can help elevate shea from subsistence income activity to entrepreneurial enterprise.
Where Oyo Fits in Nigeria’s Industrial Future
The federal government’s shea export ban — currently under review — reflects a broader vision to break Nigeria’s export dependence on raw commodities and instead achieve high‑value industrial exports.
For Oyo State, this is a defining moment. The region’s abundance of shea resources, coupled with its agricultural heritage and entrepreneurial potential, positions the state to lead Nigeria’s entry into refined shea products on the global stage.
By investing in processing infrastructure, quality standards, financing, and export systems, Oyo can:
Retain more revenue within the state economy, rather than losing earnings through raw exports,
Create jobs and business opportunities, especially for rural women and youth,
Build a globally competitive agro‑industrial sector, and
Attract investment and international partnerships for long‑term growth.
Conclusion: From Raw Nuts to Global Markets
Oyo State’s shea industry — historically rooted in local livelihoods and rural economics — has the potential to become a major export engine for the state and Nigeria as a whole. By aligning strategic government policy with investment, technology, and market access, Oyo can unlock shea’s full economic potential.
The federal ban on raw shea nut exports has reignited global focus on value addition, and Oyo’s entrepreneurs are uniquely positioned to capitalise on this shift. With the right policies and partnerships, the state can not only adapt to changing trade dynamics but lead the charge — turning natural heritage into sustainable revenue, industrial growth, and global market leadership.
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