The Federal Government has intensified efforts to fast-track the passage and implementation of the 30 per cent Value Addition Bill. It is expected that the passage of the Bill will end the practice of exporting low value raw materials and importing finished goods, a practice that severely limits the creation of high value jobs in the country.
The Bill is designed to reverse decades of economic losses by mandating the domestic processing of Nigerian raw materials before they are exported. The Minister of Innovation, Science and Technology, Dr. Kingsley Udeh described the Bill as a decisive shift in Nigeria’s industrial trajectory, stating that the country could no longer afford practices that have historically weakened its productive capacity.
The Bill is based on a 30 per cent value-addition framework designed by the Raw Materials Research Development Council (RMRDC), which is meant to help build a new culture of processing, innovation and local industrial participation, an initiative which would keep value within Nigeria’s borders.
RMRDC is preparing for major institutional expansion that will support the implementation of the Bill. Plans are afoot to recapitalize the council up to N1trillion, which signals the seriousness of the initiative.
The Bill aligns closely with President Bola Tinubu’s ‘Renewed Hope’ industrialization agenda, which places emphasis on domestic production, job creation and national competitiveness. Manufacturers, exporters and investors are expected to begin adjusting their supply chains and business models in anticipation of the transition to value-added production.
The Ministry of Science and Technology is expected to work closely with the Council to ensure seamless implementation of the legislation once it is signed into law. The Bill, it should be mentioned, rests on two key pillars: the prohibition of exporting any raw material without a minimum of 30 per cent value addition and the ban on importing raw materials that are abundantly available in Nigeria. Such measures are expected to halt the raw-export culture, stimulate domestic processing, strengthen the GDP, conserve foreign exchange and attract new investment.
The top brass at RMRDC have been intentionally engaging stakeholders ahead of assent, arguing that Nigeria could not afford to delay preparation for such a pivotal shift in industrial policy. He said early advocacy serves as a clear market signal to investors to begin retooling and building processing capacity.
Key members of the political class and the private sector have described the Bill as a turning point that would reposition Nigeria as a competitive industrial hub and end decades of value flight.
Background
The Federal Government of Nigeria has long recognized the need for value‑added processing of raw materials. This is what led to the establishment of RMRDC in 1987. There were also industrial policies focused on import substitution, but implementation was weak, and so, Nigeria continued exporting crude oil and agricultural commodities with little processing. The issue of poor implementation continued throughout the 1990s as a result of the Structural Adjustment Programmes (SAPs) carried out at the time and economic instability.
The 2000s brought with it the National Economic Empowerment and Development Strategy (NEEDS). NEEDS emphasized non‑oil exports and agro-processing (particularly of cassava, cocoa, palm oil) initiatives but infrastructure bottlenecks and power shortages hindered large‑scale value addition.
The year 2014 saw the introduction of the Nigeria Industrial Revolution Plan (NIRP). Its aim was to diversify the economy, boost manufacturing, and increase value‑added processing of raw materials. Its target sectors included agro‑processing, metals, petrochemicals, and solid minerals. Unfortunately, the NIRP had limited impact due to policy discontinuity.
Despite the challenges over the decades, Nigeria did manage to increase its raw material value addition from 15.6% in 2013 to 25.2% in 2023 but this still lags far behind peer emerging economies like South Africa (75.6%), Egypt (64.8%), and Brazil (97.6%). The 30% Value Addition Bill is Nigeria’s latest attempt to embark on a meaningful raw material value added processing industrialization drive.
