Re: 30% Processing of Export Raw Materials, By Hanniel Sebatie Noboh

Re: 30% Processing of Export Raw Materials
By Hanniel Sebatie Noboh

On the morning of July 30, Vanguard newspaper published an editorial titled “30% Processing of Export Raw Materials”, offering its perspective on the recently passed Senate bill mandating that all raw materials exported from Nigeria must be processed locally by at least 30 percent. This long-overdue legislation is a welcome development in Nigeria’s quest for economic diversification.

Nigeria remains one of the most naturally endowed nations in the world. With abundant resources such as limestone, gold, natural gas, and the globally coveted crude oil, our country boasts mineral wealth that many developed nations lack. In agriculture too, from rice and groundnuts in the North to cassava and palm oil in the South, Nigeria’s fertile soil continues to bless us with variety and abundance.

Yet, successive governments have for decades focused disproportionately on crude oil, neglecting other sectors like agriculture and manufacturing. As the Vanguard editorial rightly observed, even during economic downturns—when necessity should inspire reform—there has been little effort to diversify our export base.

This is why the passage of this bill signals an important shift. By requiring at least 30 percent local processing of all export-bound raw materials, Nigeria takes a significant step towards value addition and economic transformation.

The advantages are manifold. First, processed goods typically command higher prices in global markets. Take cocoa, for instance—a ton of raw beans sells for far less than the same quantity processed into cocoa butter. This principle applies to most commodities: the more value added, the greater the earnings.

Second, enforcing the 30 percent processing threshold will spur the development of local industries. More processing facilities will mean more jobs, improved infrastructure, and Nigeria’s transition from an exporter of raw materials to a player in the global manufacturing and semi-processed goods market. Even for domestic buyers, the availability of semi-processed inputs will reduce dependency on fully imported goods, lowering costs and supporting local production.

Additionally, the bill aligns with President Bola Tinubu’s vision of making agriculture more attractive to Nigerian youth. Many young people may not be drawn to traditional farming, but with the emergence of new processing plants, opportunities will abound in machine operations, logistics, quality control, and related fields.

However, as Vanguard also warned, the real challenge lies in implementation. Nigeria has no shortage of well-intentioned policies, but history shows that many fail at the execution stage. A lack of infrastructure, regulatory oversight, and transparency could undermine this promising bill. The risk of corruption—particularly in granting exemptions or failing to enforce compliance—must be proactively addressed.

The responsibility for enforcement rests with the Raw Materials Research and Development Council (RMRDC), which must ensure compliance with the 30 percent benchmark and uphold quality standards. Any exporter who fails to meet the requirement will face a 15 percent surcharge on the export value of their raw materials. This is a strong disincentive, but only if enforced fairly and transparently.

In conclusion, while the bill is laudable, its success hinges on rigorous implementation, political will, and institutional accountability. If executed effectively, it could be a game-changer for Nigeria’s economy. Like many Nigerians, I remain hopeful that this won’t become another forgotten policy but the beginning of a new era of industrial growth and self-reliance.

Hanniel Sebatie Noboh is a Mass Communication student at Nile University and an intern at PRNigeria. She can be reached via [email protected]

Source: EconomicConfidential | Read More