The Raw Material Research and Development Council (RMRDC) has introduced a groundbreaking bill before the National Assembly that seeks to mandate a minimum of 30 percent value addition on raw materials before they are exported from Nigeria.
The bill, which has already passed its first reading, is part of the government’s broader effort to stimulate the local manufacturing sector, preserve natural resources, and generate more jobs through increased industrialization.
Prof. Nnanyelugo Martins Ike-Muonso, the Director General/Chief Executive Officer of RMRDC, made the announcement during an interactive session with members of the Manufacturers Association of Nigeria (MAN) in Lagos.
Ike-Muonso highlighted the transformative potential of the bill, explaining that it would compel manufacturers and exporters to add significant value to raw materials before shipping them abroad.
“This legislation will mandate a minimum of 30 percent value addition to all raw materials before export. This bold move will not only protect our natural resources but will also catalyze domestic processing capabilities, create jobs, and foster industrial growth,” Ike-Muonso said.
He emphasized that the bill represents a critical step in addressing the long-standing issue of Nigeria’s heavy reliance on raw material exports, which has hindered the country’s industrial development.
By encouraging value addition, the government aims to shift from merely exporting unprocessed resources to building a more competitive manufacturing industry capable of producing finished goods for both domestic and international markets.
The proposed bill also aligns with Nigeria’s broader economic diversification agenda, which seeks to reduce dependence on crude oil exports and boost non-oil sectors, particularly manufacturing and industrial production.
Currently, a large proportion of Nigeria’s exports consist of unprocessed raw materials, with minimal local processing. This has limited the country’s ability to capture more value from its resources and contribute to its overall economic development.
The introduction of the bill follows a series of discussions on the need for deeper policy reforms in the industrial sector, with stakeholders calling for measures that would strengthen domestic production and improve the value chain for raw materials. Ike-Muonso also expressed confidence that the bill would pass through the next reading in the National Assembly, with hopes for swift legislative action.
In addition to the bill, Ike-Muonso also announced the revival of the Multi-disciplinary Task Force (MTF), a key initiative aimed at addressing challenges within Nigeria’s industrial sector.
The MTF will focus on coordinating efforts to tackle bottlenecks in manufacturing, improving the business environment, and ensuring that the policies and reforms necessary to transform Nigeria’s industrial landscape are effectively implemented.
The RMRDC’s proposed bill has been welcomed by stakeholders in the manufacturing and industrial sectors, including the Manufacturers Association of Nigeria (MAN), which has long advocated for policies that would encourage greater local processing and value addition.
MAN has also been pushing for improved access to raw materials and better infrastructure to support local production.
As Nigeria looks to recover from economic challenges exacerbated by fluctuating oil prices and the global pandemic, this policy shift towards value addition is seen as a crucial step in building a more resilient and diversified economy.
By processing raw materials domestically, Nigeria can reduce its trade deficit, enhance the competitiveness of its industries, and create a sustainable path for long-term growth.
However, some industry experts have cautioned that for the bill to have the desired impact, there must be substantial investment in the local infrastructure, skills development, and technology required to process these raw materials.
Additionally, the country must address the persistent challenges in the power sector, as reliable electricity is critical for most industrial processing operations.
The passage of this bill is expected to be a turning point in Nigeria’s industrial policy, offering a new direction for the country’s raw materials sector, reducing reliance on crude oil exports, and laying the groundwork for a more diversified and industrialized economy.
