Nigeria targets 30% local processing to triple shea industry value, unlock higher export revenue

The Nigerian Commodity Exchange (NCX) has unveiled a comprehensive Shea Value Chain Transformation Framework aimed at increasing domestic processing, improving market transparency, and tripling the value generated from Nigeria’s vast shea resources.

The framework projects that processing 30 per cent of raw shea nut production, equivalent to about 120,000 metric tonnes, could yield approximately 40,000 metric tonnes of shea butter based on a 3:1 conversion ratio. This shift is expected to increase export revenues by between two and three times current levels.

NCX estimates that while current value capture in the sector stands at about $200 million, future revenues could rise to between $400 million and $540 million annually through a combination of processed shea butter exports and remaining raw nut exports.

Industry data identifies several challenges limiting Nigeria’s ability to maximize value from its shea resources, including fragmented informal trade, weak price discovery mechanisms, inadequate processing capacity, poor traceability systems and the continued export of raw nuts with minimal value addition.

Data also shows that the global shea butter market is expected to grow at a compound annual growth rate of 7.5 per cent between 2024 and 2030, driven largely by rising demand for natural and organic cosmetics as well as increasing industrial applications in food manufacturing, particularly chocolate production.

Market projections indicate that the global shea butter industry will expand from approximately $2.27 billion in 2025 to more than $2.4 billion in 2026, presenting significant opportunities for Nigeria to increase its participation in higher-value segments of the market.

Speaking at the Stakeholders Sensitization Forum on the Future of Nigeria’s Shea Industry, Anthony Atuche, Managing Director of NCX, said the exchange is targeting the local processing of at least 30 per cent of Nigeria’s raw shea nut production to significantly boost export earnings and increase value retention within the country.

According to Atuche, despite being the world’s largest producer of raw shea nuts, accounting for more than 40 per cent of global output with an estimated 350,000 metric tonnes produced in 2024, Nigeria currently captures less than six per cent of the global shea butter market value.

He noted that much of the economic value from shea processing is currently realized outside Africa, particularly in Europe and North America, where shea butter is refined and incorporated into cosmetics, pharmaceuticals and food products.

“At current production levels, there is an opportunity to generate three times the current value of the shea sector through partial processing into shea butter,” Atuche said.

Atuche explained that the initiative aligns with the Federal Government’s policy direction following the restriction placed on the export of raw shea nuts, first introduced in August 2025 and extended in February 2026, to encourage local value addition and industrial processing.

“The idea behind that policy was to prevent Nigeria from remaining merely a supplier of raw materials and instead become a supplier of value-added products,” he said.

To support the transformation agenda, NCX unveiled a new Shea Market Architecture built around certified warehouses, warehouse receipt systems and a dedicated trading platform designed to improve traceability, price discovery and access to finance.

Under the proposed system, Warehouse Receipt Numbers (WRNs) will be used to verify inventories and facilitate structured trading. The framework also includes reference price bands and a NESS Fund mechanism to help stabilize prices and protect farmers, aggregators and processors from excessive market volatility.

According to NCX, the new market structure will enable buyers and sellers to transact with greater confidence while providing financial institutions with the assurance needed to finance commodity transactions.

Atuche emphasized that reliable data would be the foundation of the new framework, noting that inadequate information on production volumes, warehouse stocks, processing capacity and market demand has long hindered effective planning in the industry.

“We also try and strengthen the warehousing and production management system through the warehousing receipting system, because if warehousing receipting systems are there, it allows the market participant to participate and ensure that the inventory is actually there, and it removes the issue of fraud, and then ensures that there is trackability.

“Buyers and sellers will transact, therefore, with confidence. The financial institutions can finance commodity transactions with greater certainty, and then overall, policymakers can make decisions based on accurate market intelligence. For us, in starting this sensitization is the importance of data and data sharing.

“No market can function efficiently without reliable data. Without data, decisions become assumptions. With data, decisions become strategy,” he stated.

He called on stakeholders across the value chain, including farmers, aggregators, warehouse operators, processors, exporters, financial institutions and development partners, to support the creation of an industry-wide market intelligence system through timely and accurate data sharing.

The NCX boss also stressed the importance of establishing and enforcing quality standards in collaboration with regulatory agencies to improve access to premium international markets.

Atuche said the ultimate objective is to create a balanced ecosystem where domestic processors have reliable access to raw materials while exporters continue to serve international markets efficiently.

“A strong processor sector and a strong export sector are not competitors; they are partners in building a stronger industry,” he said.

He added that the long-term vision is for Nigeria to become a leading global supplier not only of shea butter but also of high-value shea-based products, while ensuring that women and rural households who form the backbone of shea collection receive fair returns for their contributions to the value chain.