By Effiong Akpan
The Nigerian economy stands at an inflection point. President Bola Ahmed Tinubu’s Renewed Hope Agenda rests heavily on driving inclusive industrialization — building local value chains, promoting exports, and deepening domestic production. Yet a recently advanced legislative proposal — the so-called 30% Local Value Addition Bill — threatens to undercut that very ambition.
The bill, now before the National Assembly, seeks to mandate that all raw materials must attain at least 30% local value addition before export and to restrict imports of inputs deemed “available locally.”At first glance, the intent appears noble: to promote local processing and stimulate job creation. But the execution, as currently conceived, is fraught with structural, technical, and institutional flaws that could destabilize both manufacturing and agricultural value chains.
A Policy That Misses Its Own LogicNo one disputes the need to add value to Nigeria’s abundant raw materials. The real issue is how it is done. The proposed bill imposes a one-size-fits-all threshold on value addition without a clear framework for measurement, certification, or sectoral differentiation.
Industry analysts, including the Centre for the Promotion of Private Enterprise (CPPE), warn that the bill’s broad application across commodities and industrial inputs is impractical.
Who determines whether a product meets the 30% benchmark?How will “local availability” be defined when many domestic substitutes fail to meet industrial standards or are produced in insufficient quantities?Such questions cut to the heart of implementation.
Without answers, the bill risks triggering export bottlenecks, import disruptions, and investor uncertainty — all at odds with the President’s agenda of expanding productive capacity and improving competitiveness.Context Matters:
Understanding the Council’s Track RecordTo understand why this proposal is problematic, one must revisit the mandate and achievements of the Raw Materials Research and Development Council (RMRDC) — the very agency being tasked to enforce it.Over the years, right from the stint of Dr. A Aribisala, Dr. A.A Aliyu, Prof Peter Onwualu, Mr A.A Abubakar to the immediate past Director-General, Prof. H.D Ibrahim, RMRDC focused on research-driven industrial transformation, not regulatory policing.
The Council led major initiatives that directly advanced the government’s self-reliance agenda.In its recent past, RMRDC established the Technology and Innovation Complex (TIC) in Abuja — a pilot-plant facility designed to promote value addition to Nigeria’s abundant natural resources through applied research and technology demonstration.
The Council also upgraded its Raw Materials Resource Centre and Analysis Laboratory, allowing industries to test and certify the quality of locally sourced raw materials to international standards.
The Council further launched an ISO 9001:2015 Certified Training Centre, ensuring Nigerian industries could attain global quality compliance, and strengthened its partnerships with the Manufacturers Association of Nigeria (MAN) to expand local sourcing across multiple sectors.
Importantly, RMRDC’s collaboration with research institutes yielded tangible products.One striking example is the Aloe Vera Project, initiated about fifteen years ago in partnership with the National Research Institute for Chemical Technology (NARICT).
Through this effort, RMRDC successfully produced powdered Aloe Vera for use in the cosmetics industry. Industrial testing confirmed its viability, with only one parameter — the Loss on Ignition (LOI) — identified for further refinement.The project demonstrated Nigeria’s capacity to develop competitive botanical and cosmetic inputs locally.
The plantation, initially sited at NARICT, was a milestone in bridging research and commercialization — a model that deserves revival, not replacement by bureaucratic overreach.These initiatives underscore that RMRDC’s strength lies in innovation, research, and industrial facilitation, not in trade enforcement or export policing.
The agency’s work has been about building capacities and fostering linkages — quietly but effectively — across Nigeria’s manufacturing value chains.Stakeholder Pushback. This is why many institutions have raised red flags.
The Nigerian Export Promotion Council (NEPC) and the Federal Competition and Consumer Protection Commission (FCCPC) have cautioned that the bill, if passed as drafted, could undermine trade and investment.The NEPC argues that value addition should be promoted through incentives and infrastructure, not rigid quotas. Forcing exporters to meet arbitrary ratios risks rendering Nigerian commodities less competitive in global markets, especially in intermediate goods such as cocoa beans, sesame, cassava chips, and solid minerals — sectors where competitiveness rests on scale, speed, and logistics.Similarly, the FCCPC warns that the bill could distort competition and violate fairness by imposing uneven burdens on SMEs and raw material traders.
Instead of driving industrialization, it could raise costs and discourage private-sector participation — the very opposite of the Renewed Hope Agenda’s intent.Implementation TrapsBeyond 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, creating red tape and uncertainty across value chains.Economic Fallout RisksIf enacted as written, the bill could constrict Nigeria’s export base, drive up production costs, and discourage investment in processing.
Producers of raw agricultural commodities such as cassava, yam, sesame, and groundnut could lose export contracts if unable to meet the rigid requirement. Manufacturers relying on imported intermediates like resins, alloys, or chemicals might face shortages or price spikes, further undermining competitiveness.Such an outcome would contradict the Renewed Hope Agenda’s emphasis on expanding domestic production and attracting investment.
The Rational Path Forward what Nigeria needs is not a punitive law but a coherent industrial policy framework anchored on research, evidence, and incentives. The focus should be on strengthening processing infrastructure, supporting research-to-market linkages, and developing export-oriented clusters — not legislating arbitrary ratios.Countries that have succeeded in deepening value addition, such as Indonesia and Malaysia, achieved this through predictable, incentive-driven programs, not compulsion.Nigeria’s comparative advantage lies in its raw materials base, entrepreneurial talent, and innovation ecosystem — as proven by the RMRDC’s own record in developing new industrial inputs, from ceramics and chemicals to botanical extracts like Aloe Vera.
Legislative Concerns and Institutional IntegrityIt is important to recall that the RMRDC Act was first passed in 1987 and remained unchanged for 35 years until it was comprehensively reviewed and reenacted in 2022.
That reenactment distilled nearly four decades of experience, institutional learning, and sectoral evolution into a modernized legal framework signed into law by the President.
The question now is: what has changed so drastically in less than two years that warrants a total repeal? What could have gone so fundamentally wrong with a freshly enacted Act that a new management would — within a year — seek to overturn an Act of Parliament?This raises deeper concerns.Is the push for repeal solely about the 30% threshold, or are there undisclosed motives?
For instance, is there an attempt to open leadership of this highly specialized scientific agency to individuals without scientific backgrounds?Even if a non-scientist currently heads the Council, that should not justify removing the long-standing requirement that RMRDC be led by a scientist, given its mandate in research and industrial development.The speed of this legislative process also raises questions.
The new bill was first read at the National Assembly in April 2025. By October — less than six months later — it had been passed by both Houses and now awaits Presidential assent.Is there more to this expeditious passage? How does a bill whose public hearing was dominated by internal staff presented as “external stakeholders” qualify as credible stakeholder engagement? Nigerians must not be hoodwinked by this charade.
This must be halted through every legitimate and transparent means available.Instead of advancing policies that constrain SMEs, the RMRDC should be advocating aggressively for incentives, tax reliefs, and support frameworks that help small businesses grow — not policies that suffocate them.Equally troubling is the current underutilization of the Technology Incubation Centre commissioned by the late President Buhari in 2023.
This platform could have served as a formidable foundation for strengthening innovation infrastructure, yet it sits idle while energy is being expended on legislative overreach.
In Conclusion the 30% Value Addition Bill, while well-meaning, risks undermining Nigeria’s industrial potential. By imposing rigid export quotas, the bill threatens to disrupt sectors like agriculture and manufacturing, raise production costs, and reduce Nigeria’s competitiveness in global markets.Instead of rigid mandates, the country needs an industrial policy that focuses on building infrastructure, incentivizing local processing, and supporting research and development.
Agencies like RMRDC have demonstrated how innovation and research can drive industrialization. Their work on projects such as Novastatin for the pharmaceutical industry and Artemisia annual for malaria treatment shows the potential of local value addition.
These efforts, along with others like the Aloe Vera project, are proof that Nigeria can build industries that compete globally — if the right policies are in place. The government must shift focus from imposing arbitrary thresholds to creating an environment where innovation and entrepreneurship can thrive. This includes investing in infrastructure, providing tax incentives, and promoting public-private partnerships to support small and medium-sized enterprises (SMEs) as they scale.Nigeria’s industrial future lies not in coercive legislation but in strategic collaboration.
By investing in research, building infrastructure, and empowering local industries, Nigeria can unlock its full potential and achieve the economic transformation envisioned by President Tinubu’s Renewed Hope Agenda.