AAK Ghana Signs Strategic MoU with Agric Ministry to Boost Shea Value Addition

Introduction: A Landmark Partnership for Ghana’s Shea Sector

In a significant move for Ghana’s agricultural and export economy, AAK Ghana Limited has formalized a strategic partnership with the Ministry of Food and Agriculture (MoFA) through a Memorandum of Understanding (MoU). Signed on February 9, 2026, in Accra, this agreement aims to catalyze a fundamental shift in Ghana’s shea value chain—transitioning from primarily exporting raw shea nuts to developing a competitive, high-value, and sustainable processed shea industry. The partnership, witnessed by Denmark’s Ambassador to Ghana, Jakob Linulf, underscores a shared vision between a global industry leader and the Ghanaian government to enhance local processing capacity, empower small and medium enterprises (SMEs), and secure Ghana’s position as a premier source for ethical, quality shea products in global markets. This collaboration is poised to deepen the impact of initiatives like AAK’s FairWild-certified Kolo Nafaso program and align with national strategies such as the Agriculture for Economic Transformation Agenda (AETA).

Key Points of the Strategic MoU

The MoU between AAK Ghana and MoFA is built on four concrete, actionable priorities designed to deliver tangible benefits across the shea ecosystem:

1. Scale the Kolo Nafaso Sustainable Sourcing Program: Expand AAK’s direct, ethical sourcing initiative to support an additional 70,000 women shea collectors, primarily in Northern Ghana, bringing total supported collectors to over 300,000. This includes investments in financing access, capacity building, guaranteed markets, logistics, and warehousing.
2. Establish the AAK Ghana Innovation Academy: Create a dedicated skills development center to train and build technical expertise for local SMEs and youth in shea processing and the broader plant-based oils and fats sector, enhancing employability and business viability.
3. Invest in Local Processing Infrastructure: Deploy world-class investment in Ghana-based shea processing facilities to increase local value addition, create over 100 skilled jobs, and improve the competitiveness of Ghanaian shea butter and derivatives in export markets.
4. Support Shea Reforestation and Parkland Management: Partner with the Tree Crops Development Authority and other stakeholders on environmental sustainability projects to ensure the long-term health of shea parklands, which are critical for raw material security.

Collectively, these priorities aim to make Ghana a “global reference point for value-added shea processing,” as stated by Lasse Skaksen, Vice President and Head of AAK West Africa.

Background: The Ghanaian Shea Industry Context

The Economic and Social Significance of Shea

The shea tree (Vitellaria paradoxa) is a vital indigenous resource for West Africa, with Ghana being one of the world’s top producers. The shea industry is a cornerstone of rural livelihoods, particularly for women. An estimated 1.8 million women across the region are engaged in shea nut collection and primary processing, with hundreds of thousands in Ghana alone. Traditionally, the value chain has been characterized by the export of raw, unprocessed shea nuts, with most high-value refining and fractionation occurring in Europe and Asia. This model limits local economic capture, exposes producers to volatile commodity prices, and fails to maximize job creation within Ghana.

Challenges of a Raw Commodity Model

Relying on raw nut exports presents several challenges:

• Price Vulnerability: Producers are price-takers in a global commodity market, subject to fluctuations that offer minimal margins.
• Limited Value Capture: Over 90% of the final market value of shea butter and its derivatives (used in cosmetics, chocolates, and pharmaceuticals) is generated after primary processing and refining, stages typically conducted offshore.
• Sustainability Risks: Unsustainable harvesting practices and deforestation threaten the long-term viability of shea parklands, which are also crucial for biodiversity and soil conservation.
• Infrastructure Gaps: Lack of investment in local processing technology, reliable energy, and quality control infrastructure hinders domestic value addition.

Analysis: Implications of the AAK-MoFA Partnership

This MoU is not merely a corporate agreement; it is a strategic intervention with multi-layered implications for Ghana’s development agenda.

Economic Transformation and Job Creation

The core objective of shifting to local value addition directly supports Ghana’s Agriculture for Economic Transformation Agenda (AETA) and the “Feed the Industry” sub-programme under the broader Feed Ghana initiative. By investing in processing facilities, AAK will create direct, skilled employment (over 100 jobs) and stimulate indirect job growth in logistics, equipment maintenance, and ancillary services. The Innovation Academy addresses a critical skills gap, ensuring a future workforce capable of operating advanced processing equipment and managing quality standards, which is essential for moving up the value chain.

Social Impact and Women’s Empowerment

The expansion of the Kolo Nafaso program is central to the social dimension. By providing guaranteed markets, pre-financing, and training to over 300,000 women collectors, the partnership aims to:

• Increase and stabilize household incomes for some of Ghana’s most vulnerable rural women.
• Formalize and professionalize the collection and primary processing segment, improving working conditions and bargaining power.
• Promote financial inclusion by linking women to formal financial services through the program’s financing mechanisms.

This focus on women aligns with national and international development goals on gender equality and inclusive economic growth.

Environmental Sustainability and Long-Term Security

The commitment to shea reforestation and parkland preservation addresses a fundamental threat to the industry. Partnering with the Tree Crops Development Authority ensures that sustainability efforts are government-backed and integrated into national land-use policies. Healthy shea parklands secure the raw material base for future generations, protect watersheds, and sequester carbon. This environmental stewardship is also a critical component of meeting the stringent sustainability criteria required by conscious consumers and brands in international markets, particularly in Europe and North America.

Market Access and Global Competitiveness

AAK’s reputation as one of the world’s largest shea processors and its possession of the first-ever FairWild certification for shea (awarded to the Kolo Nafaso supply chain) provides a powerful market advantage. This certification verifies that shea is harvested sustainably, that collectors are paid fairly, and that social and environmental standards are met. By linking Ghana’s supply chain to this certified system, the MoU helps Ghanaian shea products command premium prices and access niche markets that demand traceability and ethical credentials. Local processing further allows Ghana to export higher-value products (like refined shea butter, shea stearin, or fractionated oils) instead of low-value raw nuts, dramatically improving the trade balance.

Strategic Alignment and Government Enablement

MoFA’s involvement is crucial for creating an enabling business environment. The Ministry’s commitment to supporting the agreed priorities can help streamline regulations, improve infrastructure (like rural roads and energy supply), and facilitate public-private dialogue. This partnership serves as a model for how government can de-risk and attract private investment into strategic agricultural value chains, moving beyond simple production support to focused industrial policy.

Practical Advice for Stakeholders

The success of this MoU depends on coordinated action from various stakeholders.

For Shea Collectors and Primary Processors (Especially Women):

• Engage with Farmer Groups: Form or strengthen cooperatives to better interface with the Kolo Nafaso program and other buyers. Collective action improves negotiation power and access to training.
• Participate in Training: Actively seek out and participate in the capacity-building programs offered under the Kolo Nafaso and future Innovation Academy initiatives. Focus on post-harvest handling, quality management, and basic business skills.
• Adopt Sustainable Practices: Embrace sustainable harvesting techniques taught through the reforestation programs to ensure the long-term health of your resource base and maintain FairWild certification eligibility.

For Local SMEs and Entrepreneurs:

• Monitor Academy Offerings: Closely follow the development of the AAK Ghana Innovation Academy. Plan to enroll in courses on processing technology, quality assurance, business management, and export compliance.
• Explore Partnership Models: Consider potential subcontracting, supply, or service agreements with the new AAK processing facility or with larger collector groups supplying it.
• Invest in Quality: Position your business by adhering to international food safety (e.g., HACCP) and cosmetic (e.g., ISO 22716) standards, which will be increasingly demanded.

For the Government of Ghana (MoFA, Tree Crops Development Authority, etc.):

• Deliver on Enabling Environment Promises: Expedite the development of supportive policies, incentives for agro-processing, and critical infrastructure (reliable power, rural roads, port efficiency) that make local processing viable.
• Ensure Inclusivity: Design oversight mechanisms to ensure benefits from the MoU, especially job creation and procurement, reach targeted communities in the shea belt (Northern, Upper East, Upper West, Savannah, North East regions).
• Scale Reforestation: Use the partnership as a catalyst to launch a national shea parkland restoration program, integrating it with climate adaptation and carbon financing strategies.

For Development Partners and NGOs:

• Provide Complementary Support: Focus on areas that bolster the MoU’s goals, such as financial literacy training for women, digital tools for traceability, or research into improved shea tree propagation.
• Facilitate Knowledge Exchange: Connect Ghanaian stakeholders with international best practices in shea processing and sustainable landscape management.
• Monitor Impact: Conduct independent, longitudinal studies on the socio-economic and environmental impacts of the MoU to inform future policy.

Frequently Asked Questions (FAQ)

What is “value addition” in the shea context, and why is it important?

Value addition refers to transforming raw shea nuts into intermediate or finished products (like shea butter, stearin, or oils) within Ghana. It is crucial because processing stages capture the majority of the product’s market value. Currently, Ghana exports raw nuts at low prices and imports expensive refined shea products. Local value addition keeps more wealth in the country, creates skilled jobs, reduces dependency on commodity exports, and makes the economy more resilient.

How will small-scale women shea collectors specifically benefit?

Benefits will flow primarily through the scaled-up Kolo Nafaso program. This includes: (1) Guaranteed Offtake: AAK commits to buying their nuts, reducing market risk. (2) Access to Finance: Pre-financing or advances against future sales help manage cash flow. (3) Capacity Building: Training in sustainable harvesting, quality grading, and basic business practices. (4) Fair Pricing: The FairWild certification ensures prices cover sustainable production costs and provide a premium for community development. The goal is to move from subsistence collection to sustainable, profitable enterprise for these women.

What is the FairWild certification, and why does it matter?

FairWild is a leading international standard for sustainable and ethical wild-harvested products. It ensures that the collection of shea nuts does not harm the environment or local ecosystems, that harvesters are paid fairly and work under good conditions, and that benefits are reinvested locally. AAK’s Kolo Nafaso supply chain was the first ever shea supply chain to achieve this certification. For global buyers, especially in the natural cosmetics and ethical food sectors, FairWild certification is a trusted mark of sustainability and social responsibility, allowing Ghanaian shea to access premium markets.

Will this MoU lead to the export of raw nuts being banned?

Based on the publicly stated terms, the MoU focuses on incentivizing and enabling local processing, not banning raw nut exports. The strategy is to make local processing more attractive and profitable through investment, skills, and infrastructure. A complete export ban on raw nuts is unlikely in the short to medium term, as it could disrupt incomes for collectors not yet integrated into the formal processing supply chain. The transition is envisioned as gradual and inclusive, supported by the expanding Kolo Nafaso program which provides an alternative market.

How does this align with Ghana’s national agricultural policies?

The MoU explicitly aligns with the Agriculture for Economic Transformation Agenda (AETA), which prioritizes adding value to agricultural commodities and promoting agro-industry. It supports the “Feed the Industry” component of the Feed Ghana programme, which aims to provide quality raw materials for domestic processing and export. Furthermore, it complements the work of the Tree Crops Development Authority, which is mandated to develop and regulate Ghana’s tree crop sector, including shea, for sustainable economic growth.

Conclusion: Paving the Way for a Sustainable Shea Future

The strategic MoU between AAK Ghana and the Ministry of Food and Agriculture represents a pivotal moment for Ghana’s shea industry. It moves beyond piecemeal projects to a comprehensive, long-term framework that integrates corporate investment, government policy, and community development. By focusing on the four pillars of scaled ethical sourcing, skills development, processing infrastructure, and