The Centre for the Promotion of Private Enterprise has warned that Nigeria’s ban on raw shea nut exports is exposing local traders to potential lawsuits and damaging their business reputations.

The CPPE said the government’s sudden policy change in August has disrupted global markets and hurt farmers’ incomes across the country.

President Bola Tinubu announced a six-month temporary suspension of raw shea nut exports on August 26, saying the move would encourage local processing and boost Nigeria’s industrial sector.

However, CPPE chief executive Muda Yusuf said the abrupt ban has created serious problems for businesses that had already signed export contracts before the policy was announced.

“Existing export contracts face potential default, exposing exporters to legal and reputational risks. Loan defaults loom large, as many exporters rely on bank financing for procurement and aggregation,” Yusuf said.

The ban has had an immediate impact on shea nut prices, which have dropped by more than 30% since the policy was implemented. This price collapse has significantly reduced incomes for farmers and the middlemen who collect nuts from rural areas.

“Shea nut prices have fallen by over 30% since the ban, eroding incomes of farmers and aggregators,” Yusuf said.

Nigeria produces about 40 per cent of the world’s shea nuts, making it a crucial player in the global market.

Yusuf warned that unpredictable policies like the export ban could damage the country’s position as a reliable supplier and hurt its broader efforts to increase non-oil exports.

The CPPE boss acknowledged that local processing could create jobs and strengthen Nigeria’s industrial capacity, but argued that sudden export restrictions damage business confidence.

“Policy credibility is crucial: sudden bans on exports with immediate effect introduce uncertainty, heighten risk, and undermine investor confidence—deterring investment not just in shea but across the broader non-oil export sector,” he said.

According to Yusuf, the policy has already put thousands of jobs at risk across the entire shea nut supply chain, from farmers who grow the nuts to logistics companies that transport them.

He criticised the approach as effectively “penalising primary producers to benefit processors, creating a zero-sum scenario rather than shared growth.”

The business leader argued that adding value to raw materials is important for Nigeria’s economic diversification, but this should be done through “a strategic, inclusive, and market-driven approach” that protects farmers’ livelihoods while maintaining export growth.

The CPPE made several recommendations for how the government could handle the situation better, including setting clear timelines for phasing out raw shea nut exports, honouring existing contracts, tackling structural problems like poor electricity supply and inadequate transport infrastructure, and establishing consultation platforms to discuss policy changes.