Shea Butter Advantage: Lessons From Niger State

A quick search on Amazon showed that 1 pound of Grade-A unrefined Shea butter sells for $11.70. More than 50% of World supply comes from Nigeria!

According to the Food and Agricultural Organization (FAO), Nigeria is the world largest producer of Shea nut, capable of producing 500,000mt, with the wildly grown Shea trees predominant in 21 states across the country.

Shea butter is the fat extracted from the nut of the African shea tree. It is edible and is used as cooking oil in African communities. It is widely esteemed for its medicinal purposes; and it is also known for its role as a moisturizer in cosmetic products. Raw unrefined shea butter has been produced in Nigeria for millennia. Nigeria produces 500,000MT of unrefined shea butter annually (with a trade value of $400,000), which makes it the top producer of shea butter in the world. It is produced primarily in Kwara and Niger states; other states include Kogi, Kebbi and Ogun.

Chocolate and confectionery companies represent 95% of the demand of shea butter, as the industry uses it as a substitute for cocoa butter in chocolate making. Consequently, the price of shea nuts and butter closely follows that of cocoa butter. However, shea butter is becoming an increasingly popular ingredient in cosmetics and soaps, especially in France and the US. The cosmetic and pharmaceutical companies represent 5% of the demand of shea butter. The major importing companies are based in Denmark, Sweden and UK. Denmark and UK each import well over 50,000MT annually, while Sweden imports around 25,000MT annually.

As a result of the state government’s concentrated efforts, Niger state produces about 57% of Nigeria’s shea butter exports, according to the State’s Commissioner for Commerce, Trade and Investment, Mrs. Ramatu Yar’ adua. Since 2009, the government has made shea production an area of priority.

They have engaged the communities where shea production has been an economic and cultural force for generations. The local governments are also involved; they help to protect shea trees from being cut down for firewood. As a result of the slow traditional processes employed, Nigeria produces Grade A quality shea butter. The market has responded positively to the improved quality with higher prices. Half a kilogram of unrefined shea butter is almost double the price of a kilogram of refined shea butter. At these price points, it is better to produce unrefined shea butter.

Niger State is smart to concentrate on this, it seems the state government has plans to make further investments. In its 2017 Budget defence, the state trade minister said that the government had employed consultants to improve their whole production value chain, so it appears that Niger state is taking its economic diversification seriously.

Currently, shea nuts are picked in the wild. There are virtually no shea farms or anything like that. Production knowledge is not codified or stored so it can be lost if nothing is done. It is labour intensive because of the amount of picking and trekking that has to be done. This presents an opportunity in terms of simplifying this process. It takes shea trees 15 – 20 years to mature.

A further challenge is that the Shea trade is unregulated and unstructured. The Executive Director of the Nigerian Export Promotion Council, Segun Awolowo, revealed about N350 billion is lost to smuggling of Shea products from Nigeria every year due to the non-existence of proper structure for the Shea value chain in Nigeria.