The decision by Bola Tinubu to extend Nigeria’s ban on raw shea nut exports has sparked debate across West Africa, but Mr. Senyo Kpelly, Chief Executive Officer of Savannah & Sahel Commodities Ltd, and an expert in the Shea industry believes Ghana should not follow the same path.
Nigeria recently prolonged its moratorium on raw shea nut exports in a bid to boost domestic processing and encourage value addition.
Authorities argue that processed shea products fetch significantly higher prices than raw nuts and could improve incomes and industrial growth.
However, Mr. Kpelly cautioned that outright bans are often the “easiest and laziest” approach to industrial development and can produce unintended consequences, particularly for farmers.
“Once you artificially slow down demand through political intervention, you kill the market,” he said in an interview.
Farmers Risk Bearing the Brunt
According to Mr. Kpelly, primary producers are usually the first to suffer when governments impose export bans.
He explained that if local processors lack the capital to absorb all available raw materials, a surplus will emerge, leading to falling farmgate prices.
“It means there are going to be farmers who cannot sell,” he said. “The agency mandated to export surplus will also want to make profit, and their overheads are usually high. They end up buying at lower prices from farmers.”
He cited examples from Burkina Faso and Nigeria, where previous restrictions reportedly led to increased smuggling as traders sought alternative routes to sustain demand.
“When you distort demand and supply, the crop will find its way across borders,” he noted.
Mr. Kpelly stressed that Ghana must prioritise maintaining competitive prices for farmers to discourage the cutting down of shea trees and protect long-term production.
Efficiency, Not Protection
While acknowledging the need for value addition, Mr. Kpelly argued that the real issue lies in efficiency and technological capacity rather than export activity.
“If someone can buy raw material from Africa, ship it to Europe or India, refine it and sell more competitively than a local processor, then there is an efficiency problem,” he said.
He noted that many West African processors focus on crushing nuts and producing unrefined shea butter, which represents only semi-value addition. Yet, about 90 percent of shea butter traded globally is refined before reaching consumer markets.
“There is no single refinery in West Africa refining shea butter at scale,” he observed. “Rather than banning exports, we should be investing in refineries.”
According to him, once Ghana builds adequate refining capacity, exporting raw nuts will become naturally unattractive because local buyers will be able to offer higher prices driven by greater value extraction.
Regional Value Chain Approach
Mr. Kpelly advocated a regional strategy that allows West African countries to leverage their respective strengths.
He pointed out that Ghana currently has processing capacity of about 350,000 tonnes but produces only between 100,000 and 120,000 tonnes annually, creating excess capacity that could be supplemented by raw materials from neighbouring countries.
“West Africa should be looking at the region as one value chain,” he said.
He suggested that factories should upgrade existing equipment to include refining and fractionation capabilities, enabling the production of high-value derivatives such as cocoa butter equivalents and consumer-facing products like cosmetics and soap.
“If we are refining and producing finished products here, it makes no economic sense to export raw materials for processing elsewhere,” he said.
Gradual Reform Over Sudden Bans
Mr. Kpelly recommended gradual reforms instead of abrupt prohibitions. Governments, he said, could negotiate timelines with exporters, encouraging investment in local downstream facilities while maintaining market stability.
“Let demand and supply function naturally,” he advised. “Regulate exports, don’t ban them.”
He commended Ghana’s approach through the Tree Crops Development Authority, describing it as prudent and market-sensitive.
“Ghana is not artificially creating a glut in the system,” he said. “The goal should be to make exports unattractive over time through efficiency and innovation, not through political protection.”
Mr. Kpelly added that a successful shea strategy must balance farmer interests, industrial upgrading, and regional cooperation to ensure sustainable growth.
