The Centre for the Promotion of Private Enterprise (CPPE) has warned against the use of legislative trade restrictions to compel domestic value addition in Nigeria.
It cautions that such measures could be counterproductive without sufficient processing capacity and supportive economic fundamentals.
The warning was contained in a statement signed by the Chief Executive Officer of CPPE, Dr. Muda Yusuf, where the policy think tank argued that sustainable industrialisation cannot be achieved through compulsion alone.
According to the organisation, Nigeria’s value-addition drive must be anchored on competitiveness, sequencing, and market realities, rather than rigid controls that could distort prices and weaken both producers and processors across the value chain.
What CPPE is saying
CPPE said durable domestic value addition must begin with competitiveness rather than coercion, stressing that Nigeria first needs to deliberately build adequate processing capacity through coordinated public- and private-sector investments.
- “Reducing these structural barriers is far more effective than restricting primary-product exports.”
- “Trade restrictions should not be matters for legislative enactment; rather, they should be fiscal and trade-policy instruments administered by relevant fiscal authorities with sufficient flexibility to respond to prevailing economic conditions,” the organisation noted.
The organisation maintained that forcing value addition without first expanding installed capacity and improving utilisation rates could distort markets and undermine industrial efficiency.
Backstory
In 2025, President Bola Tinubu announced that the Federal Government will bar all Ministries, Departments, and Agencies (MDAs) from procuring foreign goods and services where local alternatives exist.
Nigeria has long pursued policies aimed at promoting domestic value addition, particularly in agriculture and solid minerals, as part of broader industrialisation and import-substitution efforts.
- Under the President Muhammadu Buhari administration, the Central Bank of Nigeria (CBN), imposed a ban on access to FX for importers of 43 items.
- Successive administrations have explored export bans, quotas, and other restrictive measures to encourage local processing, often in response to concerns about raw material exports and weak manufacturing capacity.
- In October 2024, however, the CBN lifted the ban on 43 items imposed during the tenure of Godwin Emefiele.
However, CPPE noted that these approaches have repeatedly failed to deliver sustainable industrial growth, largely because underlying structural and cost-related challenges were left unresolved.
More Insights
The think tank identified Nigeria’s long-standing structural cost constraints as the most significant barriers to competitive processing and value addition.
- Unreliable and expensive power supply continues to raise production costs for processors.
- Inefficient transport and logistics systems limit the ability of firms to move inputs and finished goods competitively.
- Limited access to long-term and affordable finance constrains investment in modern processing facilities.
- Outdated technology and weak workforce skills further reduce productivity and efficiency.
According to CPPE, unless these constraints are addressed decisively, trade restrictions risk undermining efficiency while failing to deliver meaningful industrial growth.
Why this matter
CPPE warned that poorly designed value-addition policies could harm primary producers, particularly farmers and rural communities, whose livelihoods depend on receiving fair, market-aligned prices for their output.
The organisation argued that industrial development strategies should not depend on depressing farm incomes in order to subsidise processors, as this could weaken the supply base and worsen rural poverty.
It added that a competitiveness-led framework would promote shared prosperity across the value chain, rather than redistributing income through distortionary controls.
What you should know
Stakeholders have earlier thrown their weight behind President Tinubu’s “Nigeria First Policy,” describing it as a “bold, forward-thinking move” that could accelerate Nigeria’s industrial revolution.
They viewed the policy as the start of a new era focused on enterprise, self-reliance, and national pride, driven by strong public sector leadership.
