Nigeria to save ₦1.037trillion annually from proposed raw materials bill

Director General Raw Materials Research and Development Council (RMRDC), Prof. Nnanyelugo M. Ike-Muonso, has said the proposed Raw Materials Processing and Local Production Protection Bill when passed into law will save the country N1.037 trillion.

In a press statement signed by the Director in the Directorate of Corporate Affairs, Mr. Chucks Ngaha, the Director General said the Bill will address the complex drawbacks and challenges that have stagnated the nation’s industrial sector.

According to the DG, the proposed Bill and the attendant policies emanating from the Council echoes successful strategies implemented in several countries, showcasing the potential benefits for Nigeria’s economy, citing Indonesia and Malaysia as countries that have successfully implemented similar policies.

“Indonesia’s raw material export restrictions, implemented through Law No. 4/2009 and Ministry of Trade Regulation No. 1/2017, effectively boosted domestic processing. Similarly, Malaysia’s PORLA regulations and industrial policies have created a robust processing sector.”

Muoso acknowledged that Nigeria has struggled with industrialization due to various factors, including inadequate infrastructure, inconsistent policies, and a lack of technological investment.

“One major challenge is the continuous export of raw materials by aggregators-for-export exacerbates which has limits the availability of essential inputs for local industries,” he said.

“The frustration with Nigeria’s industrial development is mainly attributable to its export-oriented focus on agricultural raw materials. In 2023, Nigeria’s agricultural exports reached ₦1.244 trillion, while imports stood at ₦2.281 trillion, creating a significant trade deficit of ₦1.037 trillion. Local industries struggle to secure raw materials as aggregators-for-export prioritize shipping agricultural commodities abroad.

“For instance, despite being Africa’s largest producer of cashew nuts, with an annual production of approximately 250,000 metric tons, Nigeria processes less than 6% locally, with the majority exported raw to Vietnam and India. This situation is also the case in the cocoa sector, where Nigeria, producing about 250,000 tons annually, processes less than 13% domestically, unlike Côte d’Ivoire, which processes over 50% of its cocoa production,” he said.