The Centre for the Promotion of Private Enterprise (CPPE) has cautioned that the proposed Raw Materials Research and Development Council (RMRDC) Bill currently before the National Assembly could have damaging consequences for Nigeria’s export-driven sectors and struggling manufacturers.
The bill, as it stands, mandates that all primary product exports must carry at least 30% local value addition and restricts manufacturers from importing raw materials deemed available in sufficient local quantity.
In a statement signed by CPPE Director and CEO, Dr. Muda Yusuf, on April 21, he warned that the bill, though well-intentioned, oversimplifies the country’s complex industrial realities and risks harming the very sectors it aims to protect.
“The current proposal in the bill will penalize exporters in the country, most of whom export primary products. Thousands of jobs in the primary products export supply chain would be put at risk,” Yusuf said.
Yusuf pointed out that even crude oil, which dominates Nigeria’s export basket, only recently began to experience local refining after years of dependency on foreign processors.
“Even crude oil export is still a major component of Nigeria’s export. Until recently, domestic refining capacity was nil.”
Export-import restrictions
According to CPPE, the proposed legislation seeks to introduce two major provisions:
- Prohibit the export of primary products that do not meet a minimum 30% local value addition.
- Ban manufacturers from importing raw materials deemed “sufficiently available” in Nigeria.
While acknowledging the value of industrialization and backward integration, Dr. Yusuf warned that the proposal lacks a balanced and evidence-based approach.
“On the face of it, the idea of promoting local value addition is good for the economy and potentially enhances the chances of better earnings from our exports.
But the policy has to ensure a balance between the interests of exporters of primary products and the processors,” they noted
Risks to jobs, exports, and the supply chain
The CPPE warned that if the bill is passed, it could jeopardize thousands of jobs within Nigeria’s non-oil export supply chain, particularly affecting exporters of critical commodities like cocoa, cashew nuts, gum Arabic, ginger, sesame seeds, and shea butter.
“The current proposal in the bill will penalize exporters in the country, most of whom export primary products. Thousands of jobs in the primary products export supply chain would be put at risk.”
Yusuf pointed out that even crude oil, which dominates Nigeria’s export basket, only recently began to experience local refining after years of dependency on foreign processors.
“Even crude oil export is still a major component of Nigeria’s export. Until recently, domestic refining capacity was nil.”
Implementation concerns
CPPE criticized the bill for being vague and lacking operational clarity, asking the following critical questions:
“What metrics would be used to determine the minimum 30% value addition. Who will determine and give approval for the export to proceed? What study has been done to determine the local processing capacity for each category of primary products currently being exported?
What metrics would be used to determine raw materials that manufacturers would be allowed to import into the country? What is the effective time frame for implementation?
Is it within the mandate of the RMRDC to be promoting the ban of exports or imports?” they stated.
- The CPPE argued that the core issues confronting local manufacturing and agro-processing are high production costs, poor infrastructure, and multiple taxation, not raw material availability. These structural problems, Yusuf said, are what must be addressed for value addition to thrive.
“Most agro processors have collapsed not so much because of the raw materials availability, but the challenges of productivity and competitiveness.”
“Production costs are prohibitive. The cost of energy, cost of funds, logistics cost, bureaucratic bottlenecks, exchange rate, multiple taxation, etc. These are bigger issues that need to be addressed to promote value addition,” he noted.
He added that the approach taken by the bill is superficial and targets symptoms rather than root causes.
“We should be causative in our approach to solving problems and focus less on the symptoms.”
Potential for regulatory bottlenecks and corruption
Dr. Yusuf also warned that the bill could open new avenues for regulatory capture and corruption as exporters and manufacturers would be subjected to additional approval processes.
“If passed, the bill would create new corruption gateways in the bureaucracy as businesses will now be burdened with another chain of approvals.”
Highlighting legal and institutional boundaries, CPPE stressed that the RMRDC and the Ministry of Science and Technology lack the constitutional authority to regulate trade flows.
Trade and export regulations fall under the fiscal policy domain, which is managed by the Ministries of Finance, Industry, and National Planning—with necessary input from the Nigeria Export Promotion Council (NEPC).
“The issue of export or import ban is not within the remit of the Raw Materials Research and Development Council or the Ministry of Science and Technology. It is in the realm of fiscal policy, which is within the purview of the Ministry of Finance, working in collaboration with the Ministry of National Planning and the Ministry of Industry, Trade and Investment.”
“And in this particular instance, the Nigeria Export Promotion Council [NEPC] must be in the loop. This is essential to determine the implications for the non-oil export sector and the manufacturing sector, and the economy as a whole. It is also important for policy coordination and coherence.”
Call for bill withdrawal
The CPPE has urged the National Assembly to discontinue deliberations on the proposed RMRDC bill, warning that its provisions fall outside the scope of what should be legislated.
- It argued that trade policies—especially those related to import and export regulation—are typically managed through fiscal instruments and not through legislative processes, as they require flexibility and periodic adjustments in response to economic conditions.
- Instead of venturing into trade policy, the CPPE advised that the RMRDC should return to its core function of supporting manufacturers through research that enables cost-effective access to raw materials.
“We therefore submit that the national assembly should discontinue deliberations on the bill and encourage the raw material research and development council to focus on its core mandate of raw materials research to offer the most cost-effective raw materials option for manufacturers. The council’s involvement in trade policy matters is an aberration. Besides, the bill has a very weak value proposition.”
According to the organization, the bill’s current direction represents a policy overreach with limited practical value and risks disrupting the broader industrial ecosystem.
