THE VALUE ADDITION BILL

It is a misguided bill that could derail the country’s industrial promise, argues

EFFIONG AKPAN

Nigeria stands at an economic crossroads. President Bola Ahmed Tinubu’s Renewed

Hope Agenda prioritizes inclusive industrialization by strengthening local value chains, boosting exports, and increasing domestic production. However, the proposed 30% Local Value Addition Bill, now before the National Assembly, could undermine these

goals. The bill mandates that all raw materials must achieve at least 30% local processing

before export and restricts imports of inputs considered “available locally.” Though well-

intentioned, its current design contains structural and technical flaws that could disrupt manufacturing and agricultural value chains rather than strengthen them.

No one disputes the need to add value to Nigeria’s raw materials; the question is how.

The proposed bill applies a blanket 30% value-addition requirement without a clear

framework for measurement, certification, or sector-specific standards. Analysts,

including the Centre for the Promotion of Private Enterprise (CPPE), warn that

determining what qualifies as “local availability” will be difficult when many domestic

substitutes either fail industrial standards or exist in limited quantities. Without clarity,

the bill could create export bottlenecks, restrict essential imports, and fuel investor

uncertainty — undermining efforts to expand productive capacity and improve global

competitiveness.

To understand why the 30% value addition proposal is problematic, it is important to

revisit the mandate and achievements of the Raw Materials Research and Development

Council (RMRDC), the agency being tasked to enforce it. Historically, from the tenure of

leaders such as Dr. A. Aribisala, Dr. A.A. Aliyu, Prof. Peter Onwualu, Mr. A.A. Abubakar,

and most recently Prof. H.D. Ibrahim, RMRDC has focused on research-driven industrial

transformation, not regulatory policing. The Council has played a strategic role in

advancing the government’s self-reliance and industrial development agenda through

tangible, innovation-focused initiatives.

In recent years, RMRDC established the Technology and Innovation Complex (TIC) in

Abuja, a pilot-plant facility created to promote value addition to Nigeria’s natural

resources through applied research and technology demonstration. It upgraded its Raw Materials Resource Centre and Analysis Laboratory, enabling industries to test and

certify locally sourced raw materials to international standards, and launched an ISO

9001:2015 Certified Training Centre to strengthen quality compliance in manufacturing.

It has also deepened collaborations with the Manufacturers Association of Nigeria

(MAN), boosting local sourcing across multiple sectors.

One notable success is the Aloe Vera Project, conducted with the National Research

Institute for Chemical Technology (NARICT). This initiative produced powdered Aloe Vera

for use in the cosmetics industry, proving the viability of localized botanical inputs and

demonstrating how research and commercialization can work in tandem.

These examples show that RMRDC’s strength lies in innovation, capacity building, and

industrial facilitation — not in trade enforcement, export policing, or setting mandatory value-addition quotas.

Several key institutions have warned that the proposed 30% Value Addition Bill could

harm trade, investment, and competitiveness. The NEPC argues that value addition

should be driven by incentives and infrastructure rather than rigid export quotas, which could make Nigerian commodities less competitive. The FCCPC adds that the bill risks distorting markets and burdening SMEs, ultimately discouraging private-sector

participation instead of advancing industrialization.

Beyond the policy logic lies a structural problem. The bill assigns enforcement

responsibility to RMRDC, a body constitutionally designed for research and

development. While the Council has proven expertise in laboratory analysis, product

development, and value chain studies, it is not built for nationwide enforcement or

certification of export ratios.

Such a task would require multi-agency coordination involving the Standards

Organisation of Nigeria (SON), NAFDAC, Customs, and the Federal Ministry of Industry,

Trade and Investment. Yet, the draft legislation provides no mechanism for that

coordination, no transparent formula for determining percentage thresholds, and no

transition plan for affected industries.

The result would be regulatory confusion — multiple agencies interpreting the same law

differently.

If enacted as written, the bill could constrict Nigeria’s export base, raise production

costs, and discourage investment in processing. Agricultural producers such as cassava, yam, sesame, and groundnut exporters could lose contracts if unable to meet the rigid requirement, while manufacturers relying on imported intermediates like resins, alloys,

or chemicals may face shortages or price spikes. This would undermine the Renewed

Hope Agenda’s focus on boosting domestic production and attracting investment.

What Nigeria needs is not punitive legislation but a coherent industrial policy grounded

in research, evidence, and incentives. Priority should be given to processing

infrastructure, research-to-market linkages, and export-oriented industrial clusters, not

arbitrary value-addition ratios. Countries like Indonesia and Malaysia deepened value

addition through predictable, incentive-driven programs. Nigeria’s strengths — raw

materials, entrepreneurial capacity, and innovation ecosystems — already show the

potential for competitive industrial inputs.

The RMRDC Act, originally enacted in 1987, was comprehensively reviewed and

reenacted in 2022 after 35 years of institutional experience and sectoral evolution.

It is therefore concerning that, less than two years later, there is a move to repeal

this modernized framework without clear justification.

The speed of the legislative process — introduced in April 2025 and passed by both

chambers by October — raises questions about stakeholder engagement and

transparency, especially as its public hearing was dominated by internal staff

presented as external stakeholders.

There are also deeper concerns that the repeal may seek to weaken the

longstanding requirement that RMRDC be led by a qualified scientist, despite the

agency’s research mandate. Rather than pushing restrictive legislation that

constrains industrial growth, RMRDC should focus on incentives, innovation

support, and better use of existing assets such as the Technology Incubation

Centre, which remains underutilized despite its commissioning in 2023..

The 30% Value Addition Bill could undermine Nigeria’s industrial growth by imposing rigid

export quotas that raise costs, disrupt key sectors, and weaken global competitiveness.

Instead of mandates, Nigeria needs policies that build infrastructure, incentivize local

processing, and support research-driven innovation like that demonstrated by RMRDC

projects. A collaborative, incentive-based approach will better empower SMEs,

encourage investment, and deliver the industrial transformation envisioned under the

Renewed Hope Agenda.

Akpan writes from Abuja