West Africa is on the brink of losing substantial revenue from the shea butter industry, with estimates suggesting a forfeiture of billions of dollars due to inadequate industrial refining capabilities. This insight comes from Senyo Kpelly, CEO of Savannah and Sahel Commodities Ltd, who emphasizes that the region’s lack of large-scale shea butter refineries is a critical issue that overshadows ongoing debates about export policies.
Kpelly points out that no significant refining operations exist in West Africa, stating, “Rather than imposing export bans, we should focus on developing our refining capacity.” His comments surface amid heightened discussions regarding Nigeria’s recent decision to extend a ban on raw shea nut exports until February 2027. Kpelly describes this approach as a misguided attempt at protecting farmers, warning that it may inadvertently harm their interests.
According to Kpelly, the broader market dynamics are often ignored in policy discussions. Currently, approximately 90% of globally traded shea butter is refined before reaching consumers. However, the processing in West Africa typically halts at the production of unrefined butter, which he describes as a minimal form of value addition. The financial implications of this lack of processing infrastructure are significant; raw shea nuts can sell for around one dollar per kilogram, while refined butter can reach up to three dollars. Even more lucrative are refined products, which may sell for between six to ten dollars per kilogram on international markets.
By investing in refining facilities, Kpelly argues that the region could retain a larger share of this value chain. “If Ghana develops sufficient refining capacity, local buyers will naturally offer better prices, making the export of raw nuts less appealing,” he asserts. He advocates for a regional strategy that unites various countries within West Africa, highlighting that Ghana can process about 350,000 tonnes of shea nuts annually but only produces 100,000 to 120,000 tonnes, indicating a potential for sourcing raw materials from neighboring nations.
Instead of competing through export restrictions, Kpelly believes West African countries should collaborate to form a cohesive value chain. “We must view West Africa as a unified entity,” he explains. “Investing in refining and production of finished products locally is more economically viable than exporting raw materials for processing abroad.”
On the policy side, Kpelly suggests that governments should negotiate gradual timelines with exporters rather than implementing sudden bans. This approach would allow for necessary investments in processing facilities while preventing abrupt market disruptions that could lead to reduced prices for farmers and increased smuggling activities across borders.
He cites examples from Burkina Faso and Nigeria, where previous restrictions led to significant cross-border movements of crops. “We should let the market dictate demand and supply,” Kpelly concludes. “Regulation is key, but outright bans are not the solution.”
