Where is the money in Shea ?
How strategic funding can help to ensure a global beauty industry creates local profit
In West Africa, where most shea is harvested, it is traditionally women that collect shea nuts from nearby parklands, turning the oily kernels into smooth shea butter. This requires many stages and processes, from labor to collection and lastly carrying to the work of boiling, drying, shelling, roasting, and pounding.
The effort is time-consuming and arduous and is done by rural people living in some of the world’s poorest countries.
Now that Shea is big in beauty circles and pharmaceuticals due to its nutrient-rich and anti-inflammatory properties, there is an opportunity to try and guide the profits from sales of creams, salves, and balms to the people who need it most, meaning women in countries like Benin and Burkina Faso and Togo.
The key to getting shea collectors and processors good pay is wielding the power of the community rather than individuals. Efforts by local and regional institutions and international development partnerships – who are also keeping in focus private financing – are assisting people working in the shea sector across West Africa. This includes helping women form cooperatives, through which they can improve their incomes and their production skills so their shea butter is up to international standards, and work together to advocate for better prices and access needed funding.
One initiative the GSA is leading (with US $2.5 million in support from the Enhanced Integrated Framework (EIF), $850,000 from the GSA and the United States Agency for International Development (USAID), and $264,000 from the private sector) is addressing multiple parts of the shea value chain. Fifty warehouses will be built across Benin, Burkina Faso, Mali, and Togo to house thousands of tons of shea products. Such facilities are much needed by women’s shea cooperatives as individual households usually have nowhere to store shea nuts, kernels, and butter. The GSA estimates that women can earn 30-50% more as a result of access to storage.
Kingbo of the AKB said, “A challenge is that the women’s cooperatives do not control the price fluctuations. The market dropped significantly in 2020 as a result of COVID-19, which created difficulties for the cooperatives here because they could not sell their products with better offers.”
“Our goal is to open up the Beninese shea actors to other markets, such as in Asia and North America. The value chain is not using shea efficiently, and if we can break into new markets there will be competition and prices could multiply by 2 or 4 times,” he said.
Money has been flowing to mitigate pandemic-induced issues and support value chains. For example, the West Africa Trade & Investment Hub is funding the Togo-based Alaffia with US$299,000 to help them manage the disruptions and loss of orders due to COVID-19.
Funded by USAID, the West Africa Trade & Investment Hub works to spur trade by supporting small businesses to catalyze their investment and export abilities. The investments from the US$96 million grant facility generally go to enterprises involved in agricultural supply chains like rice and cashews that can generate exports within and outside the region. The support to Alaffia is their first in the shea sector as part of COVID-19 grants dedicated to businesses operating in West Africa that have been affected by the pandemic.
“When we spoke with Alaffia we saw the impact. We saw the increased costs that they had – instead of the regular shipments that they would do by sea, for some of their products they had to stop shipping, or they had to airlift them, at a much higher cost. So it created a significant disruption in their supply chain,” said Etienne Chia-ah, Public Private Partnership Manager at the West Africa Trade & Investment Hub.
In Benin, the challenges women face include difficulties accessing shea collection sites as they are increasingly distant from villages; insufficient equipment like basins, gloves, and quality control items to measure pH and moisture levels; and access to suitable credit, according to Kingbo.
“The shea producers are a family – the National Federation of Shea Nut and Butter Producers of Benin – and these women need to be taken into account more seriously. We need more cooperatives as not all collectors have joined yet. And we need structural investment for mechanized and industrialized production, storage warehouses, drying areas, and other equipment and infrastructure,” Kingbo said.