The director-general of the Raw Materials Research and Development Council (RMRDC), Prof. Nnanyelugo Ike-Muonso has touted that the Federal Government could save ₦1.037 trillion annually if the proposed 30 per cent Raw Materials Processing and Local Production Protection Bill, sponsored by the Council and currently before the National Assembly, is passed into law.
In a press statement signed by the council’s director of corporate affairs, Mr. Chucks Ngaha and made available to journalists, Ike-Muonso reiterated that the bill, which mandates minimum local processing requirements, has passed its first reading and will proceed to a second reading next week. He stated that its enactment would address longstanding challenges hindering the nation’s industrial sector.
According to the DG, the proposed bill and associated policies draw inspiration from successful strategies implemented in other countries, such as Indonesia and Malaysia, which have transformed their economies through similar measures.
He explained, “Indonesia’s raw material export restrictions, enforced through Law No. 4/2009 and Ministry of Trade Regulation No. 1/2017, significantly boosted domestic processing. Similarly, Malaysia’s PORLA regulations and industrial policies have established a robust processing sector.”
Ike-Muonso noted that Nigeria has struggled with industrialisation due to factors such as inadequate infrastructure, inconsistent policies and insufficient technological investment. A key issue, he said, is the continuous export of raw materials, which limits the availability of essential inputs for local industries.
While acknowledging the role of agricultural produce aggregators-for-export in the value chain, the DG emphasised the need for a paradigm shift in their operations to support domestic industrial growth.
“Nigeria’s agricultural produce aggregators-for-export are crucial intermediaries in the value chain, connecting farmers to domestic and international markets. However, their focus on export over local value addition deprives industries of essential raw materials, stifling economic growth,” he said.
“For example, while exporting raw cocoa beans may be lucrative, it leaves local chocolate manufacturers without the resources needed to produce value-added products. Similarly, exporting raw soya beans and cashew nuts prevents local processors from creating higher-value products like soya flour and processed cashew nuts,” he added.
The director-general highlighted Nigeria’s industrial potential, especially in agriculture and lamented the nation’s overreliance on raw material exports. He pointed to 2023 trade figures, which showed agricultural exports at ₦1.244 trillion and imports at ₦2.281 trillion, resulting in a trade deficit of ₦1.037 trillion.
“For instance, Nigeria is Africa’s largest producer of cashew nuts, with an annual output of about 250,000 metric tonnes. Yet, less than 6 per cent is processed locally, with most exported to Vietnam and India. The same applies to cocoa, where only 13 per cent of Nigeria’s annual production of 250,000 tonnes is processed domestically, compared to Côte d’Ivoire, which processes over 50 per cent of its cocoa production,” he said.
The press statement further emphasized that this trade deficit, compounded by the country’s export-oriented agricultural practices, has persisted for five consecutive years, underlining inefficiencies in the system.
To address these issues, Ike-Muonso advocated significant investments in technology and infrastructure to enhance local production processes and product quality. He also called for capacity-building programs to develop the skills of local industry workers.
“Nigeria can reduce its dependence on raw material exports by fostering innovation, creating an enabling environment, and building a resilient, diversified industrial base,” he stated.
The DG concluded that such transformation is crucial for job creation, stimulating innovation, and achieving sustainable economic development. It would position Nigeria to compete globally while leveraging its abundant agricultural resources effectively.
