After decades of exporting raw materials at giveaway prices and importing finished products at steep costs, Nigeria is moving to end a cycle that has drained jobs, weakened industries, and exposed the economy to global shocks. The Federal Government’s proposed RMRDC 30% Value-Addition Bill—hailed as one of the nation’s boldest industrial reforms—seeks to mandate local processing before export, signalling a decisive push toward industrialisation, innovation and economic self-reliance, reports JULIANA AGBO
For decades, Nigeria has heavily relied on exporting unprocessed raw materials—cocoa, cotton, minerals, timber, and agricultural produce—only to import finished products at far higher prices. The consequences are well known: weak productivity, limited job creation, pressure on foreign exchange, and an economy dangerously exposed to global shocks.
To reverse this pattern, the Federal Government is championing the Raw Materials Research and Development Council (RMRDC) 30% Value-Addition Bill, which would mandate that no raw material leaves Nigeria without at least 30 percent local processing. Stakeholders at a one-day National Advocacy and Sensitisation Conference in Abuja described the Bill as one of the most transformative industrial policies proposed since independence. According to the Minister of Innovation, Science and Technology, Dr. Kingsley Tochukwu Udeh, the urgency of the legislation stems from a long-standing economic miscalculation. For years, he said, Nigeria’s model of exporting raw materials while importing finished goods has amounted to a “pact with poverty”—a system that exports national wealth and imports unemployment.
Despite being the world’s sixth-largest producer of cassava and a leading global producer of cocoa, cashew, cotton, sesame, and several minerals, Nigeria still ships these commodities abroad at basement prices, only to buy them back as costly chocolates, textiles, oils, pharmaceuticals, and machinery. This practice, Udeh noted, has crippled industries that could employ millions. Although Nigeria’s value-addition rate has risen from 15.6 percent in 2013 to 25.2 percent in 2023, the Minister stressed that this progress remains insufficient for true structural transformation. The Bill—already passed by the National Assembly and awaiting presidential assent—seeks to ensure that materials such as lithium and cocoa are substantially processed locally before export. Udeh added that the policy will strengthen manufacturing, deepen local content, and drive innovation. “With this law,” he said, “value addition becomes not just a policy but a legal obligation with far-reaching economic impact.”
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Expected economic benefit on each commodity
The minister explained that the percentage of value addition would vary depending on the mineral or commodity, but would be calculated based on the final market product. Using lithium as an example, Dr. Udeh lamented that Nigeria currently exports most of it in its rawest form, forfeiting the much higher earnings and jobs that come with processing the mineral locally. “With this law, we could begin to talk about adding value to the lithium, going from lithium ore to lithium concentrate and lithium salt. Nigerians will be doing that in Nigeria. That is employment, that is capacity building, and that is infrastructure development.”
He projected that the economic effects would be substantial, including higher Gross Domestic Product (GDP), improved balance of trade, job creation, expanded production capacity and stronger national sovereignty. The minister argued that Nigeria must break its long-standing dependence on exporting raw materials and importing finished goods at significantly higher prices. “Nigeria is, at the moment, an import-dependent economy. This leads to capital flight and depletion of foreign currency reserves. For example, we export cocoa beans and buy them back as chocolate at far higher prices. This 30% value addition is one of the most significant moves toward industrialisation and import substitution,” he added.
A new push to woo investors
He dismissed concerns that the new law might discourage investors, insisting instead that it would attract greater foreign participation by compelling companies to establish processing plants in Nigeria. “It will not scare investors. It will rather attract them. This law gives confidence to investors that Nigeria encourages value chains across all products,” he said.
Beyond value addition, Dr. Udeh explained that the Federal Government is intensifying efforts to reposition the country’s science, technology, and innovation (STI) ecosystem. Speaking on wider reforms, he stressed that Nigeria possesses the ideas and intellectual competence needed for global leadership in innovation but continues to lack the enabling environment. “Nigeria is not lacking in ideas. We’re not lacking in capacity, intellectually or in innovation. What is needed is the right environment and direction,” he noted.
His priority, he said, is to ensure that research findings across institutions are translated into products and services that solve national problems. The minister lamented that many innovations are “cooling off on shelves” and said the Bola Tinubu administration is determined to reverse this by strengthening institutions, energising researchers, and supporting commercialisation. Dr. Udeh further explained that the 30% mandatory value-addition requirement forms part of a broader set of reforms aimed at deepening industrial capacity. He said agencies such as the Raw Materials Research and Development Council (RMRDC) are developing dashboards, data systems, and support infrastructure to help operators comply with the new policy. “The Federal Government understands that to talk about 30% value addition, we must provide the necessary infrastructure and support systems,” he added.
On sanctions, the minister clarified that violators would face economic penalties designed to deter non-compliance. “If you breach the law, there will be sanctions— not necessarily imprisonment or fines, but economic-related sanctions that will dissuade players from flouting the law,” he said. He stressed that incentives, including improved infrastructure, funding, and technical assistance, will accompany the enforcement framework. According to him, the success of the bill is tied to job creation, industrial expansion, and long-term national self-reliance. “This 30% value addition is one of the actions that shows government is encouraging innovation not just by mouth, but by action,” he said.
He added that both government and private-sector leaders, including the Manufacturers Association of Nigeria, support full implementation. Asked how he hopes to be assessed at the end of his tenure, he said his goal is measurable progress in innovation-led industrialisation and expanded local manufacturing. “When a 10% increase in manufacturing value addition can raise our GDP by 2.5%, the cost of inaction is a luxury we can no longer afford,” he warned.
Pathway to local participation
The Bill, he insists, offers a concrete pathway to lasting economic change. Dr. Udeh situated it within a broader policy vision anchored on Presidential Executive Order No. 5 (EO5), signed in 2018 to prioritise Nigerian professionals, indigenous companies, and local raw materials in public projects. “EO5 has been our constitutional compass,” he explained. “But until now, its power has been aspirational rather than enforceable.”
The challenge, he said, was never intent but implementation. While EO5 encouraged local participation, it lacked mechanisms to ensure compliance in the non-oil sector. The RMRDC 30% Value-Addition Bill, he argued, provides the missing link—a legislative engine that transforms EO5’s principles into measurable obligations. If EO5 offered the vision, this Bill supplies the machinery. By mandating a minimum processing threshold, incentivising technology transfer, and compelling companies to build capacity within Nigeria, it anchors an industrial framework that retains value within the economy.
The Minister also described the Bill as a competitive imperative in the era of the African Continental Free Trade Area (AfCFTA). The AfCFTA opens access to a 1.3-billion-person market but also intensifies competition for industrial dominance. “AfCFTA is not for raw material peddlers,” he warned. “It is for value-adding industrial powerhouses.” A mandatory 30% processing requirement, he said, will help Nigerian businesses capture greater market share across Africa by exporting semi-finished and finished goods rather than raw commodities. It will also shield domestic producers from cheap, unprocessed imports that undermine local industries. He urged researchers and academics to align their innovations with emerging industrial needs. “The market for your solutions is about to be guaranteed by law… Align your research with the 30% challenge,” he said, calling the Bill “a covenant with the next generation of Nigerians.”
Corroborating this view, the Director General of RMRDC, Prof. Nnanyelugo Ike-Muonso, said his mandate has been to reposition the Council as the engine room of Nigeria’s industrialisation. Industrial growth, he noted, depends on ensuring that at least 80% of the country’s natural resources are used in manufacturing. “Value addition is non-negotiable,” he said, adding that codifying this agenda into law reduces the risk of policy reversals and secures long-term economic stability.
Why advocacy before presidential assent?
Prof. Ike-Muonso noted that legislative assent to the Bill is merely the firing gun. “But our industries must already be on the blocks, poised to sprint,” he said. Waiting until after assent, he argued, would create damaging delays at a time when global competition is fast and unforgiving. Industries need sufficient time to retool, adjust supply chains, secure technical partnerships, and prepare for full compliance. Advocacy at this stage, he stressed, is not presumptuous but preparatory. Early communication signals seriousness, reduces uncertainty, and enables investors to plan. “The era of raw export is ending. If you wish to participate in the Nigerian market, begin building your processing capacity now.”
Both the Minister and the Director-General outlined clear expectations for all sectors. Manufacturers and processors, they said, must begin expanding processing plants, retrofitting existing facilities, building new semi-finished production lines, and preparing for certification and compliance requirements. Small and Medium Enterprises (SMEs) were urged to position themselves within the supply chains that the Bill will stimulate—packaging, logistics, agro-processing, industrial clusters, and export-ready value chains. Prof. Ike-Muonso further called on domestic and foreign investors to view this moment as a green light for agro-industrial processing, mineral value addition, technology-transfer partnerships, and backward integration projects.
The need to ensure compliance
They emphasised that the Nigeria Customs Service, Standards Organisation of Nigeria (SON), National Agency for Food and Drug Administration and Control (NAFDAC), Nigerian Export Promotion Council (NEPC) and other border agencies will have critical responsibilities: verifying value-addition certificates, ensuring compliance, blocking illegal raw exports, and harmonising standards to give effect to the law. He added that resource-rich states will play a central role by creating incentives for local processing, establishing industrial clusters, providing infrastructure, and strengthening raw material supply networks. Civil society and the media, he noted, will be vital in disseminating information, ensuring transparency, training SMEs, and holding institutions accountable.
“We must prepare stakeholders’ minds for what to expect immediately upon assent. This Bill is not just a document; it is a declaration of Nigeria’s economic independence,” he said. If passed into law, the RMRDC 30% Value-Addition Bill will reshape Nigeria’s export architecture, domestic manufacturing, technology adoption, job creation, and foreign exchange inflows.
The President of the Manufacturers Association of Nigeria (MAN), Otunba Francis Meshioye, projected that the Bill will trigger thousands of new processing plants across agriculture, solid minerals, and petrochemicals. It will create high-skill jobs for young Nigerians, ease pressure on the naira by replacing imports with local production, attract investments into industrial zones, and raise manufacturing value addition significantly within a decade. “With AfCFTA opening Africa’s borders, Nigeria cannot stand idle. Exporting raw materials only fuels the industrial growth of other African nations. With value addition, however, Nigeria can compete as a continental industrial power,” he said.
