Nigeria’s cashew industry is entering a critical phase, as mounting policy pressure, rising production costs and internal governance disputes converge on a sector that sustains more than five million livelihoods.
At the heart of the unfolding crisis is a policy debate over whether to restrict or outright ban the export of raw cashew nuts.
The National Cashew Association of Nigeria, (NCAN) has pushed back strongly, warning that such a move could distort pricing and transfer the burden of industrialization onto small holder farmers.
Ojo Joseph Ajanaku, embattled national president of the association, who briefed the media following the extraordinary general meeting of the association in Abuja on Monday, said the proposal risks forcing farmers to sell below market value under the guise of promoting local processing.
He argued that any attempt to compel domestic supply without fixing structural inefficiencies would amount to “subsidising processors in disguise” at the expense of producers.
The concern is rooted in the fragile economics of cashew production in Nigeria. The sector is dominated by small-scale farmers cultivating less than one hectare. For many, the cost structure is already prohibitive.
“Labour and farm inputs consume a significant share of earnings before harvest. By the time produce is ready for market, poor rural infrastructure imposes another layer of cost.
He said “Farmers often travel between five and 15 kilometres through difficult terrain before accessing transport links. Combined, production and logistics can erode close to 70 percent of potential income”
Against this backdrop, industry operators warn that limiting export options would compress farmgate prices further, potentially triggering supply shocks.
The association recalled the 2017 downturn, when a sharp price crash led some farmers to cut down cashew trees, underscoring the sensitivity of production to price incentives.
He agreed that while the policy push is driven by the need to deepen local value addition, processors themselves are struggling under macroeconomic constraints that limit competitiveness.
“Access to finance remains a major barrier. Borrowing costs range between 25 and 35 percent, making it difficult to fund inventory in a sector where processing requires year-round operations despite a short harvest window. Operators must often store raw materials for up to nine months, significantly increasing financing pressure.
Energy costs further complicate the equation. With limited access to stable power, most processors rely on diesel, raising operational expenses and squeezing margins. Industry leaders argue that without concessionary financing in the range of three to five percent and targeted energy support, large-scale processing will remain commercially unviable.”
Ajanaku maintained that the employment argument also complicates the policy direction. According to the association, the broader cashew value chain supports more than five million people.
In contrast, even an aggressive shift to full domestic processing of Nigeria’s current output estimated between 350,000 and 400,000 metric tonnes would generate no more than 35,000 direct jobs.
This disparity, stakeholders say, raises questions about the trade-offs embedded in the proposed policy.
Nigeria’s weakening global position adds urgency to the debate. Once producing about 700,000 metric tonnes annually, the country has lost ground to competitors.
“Ivory Coast now leads global production with over one million metric tonnes, supported by more coordinated policies and stronger export systems.” He said
Industry players warn that policy misalignment could further erode Nigeria’s competitiveness, particularly in a market where international buyers prioritize stability and price transparency.
There are also concerns about external commercial interests shaping domestic outcomes. The association alleged that foreign actors have historically influenced price movements, particularly during peak trading periods. Recent price stability, it said, has come from improved local coordination, but could be undermined if market controls shift.
Compounding these pressures is a leadership dispute within the association itself.
The body confirmed the suspension of Sunday Uzoechi, as board chairman and Abraham Adeshida, as board secretary. It also stated that Ademola Adesokan is no longer recognized as a member having been expelled in January.
Ajanaku informed that the board of trustees has been expanded to 11 members, although uncertainty remains around two members who have indicated intentions to resign but are yet to formalize their exit.
While the association maintains that the internal crisis has not disrupted operations, governance tensions come at a delicate moment when unified industry representation is critical to influencing policy direction.
Beyond policy and governance, insecurity in rural producing areas remains an underlying risk. Stakeholders note that safety concerns can disrupt harvesting, increase transport costs and discourage investment in farming communities, further weakening the value chain.
The current moment presents a complex policy crossroads. Balancing export competitiveness, local industrialization and rural livelihoods will require more than a single policy lever.
Industry operators are advocating a phased and incentive-driven approach. This includes maintaining open export channels to protect farmer pricing, introducing low-interest agro-processing loans, improving rural infrastructure and addressing energy constraints.
Without these supporting measures, stakeholders warn that a blunt restriction on exports could shrink the sector rather than strengthen it.
For now, the direction of policy and the ability of stakeholders to align on a workable framework will determine whether Nigeria’s cashew industry can stabilize and rebuild or continue to lose ground in an increasingly competitive global market.
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