Conversations with Nigerian delegates attending the annual Nigeria-Belgium Luxembourg Business Forum revealed strong support for retaining more value at home. But they also reinforced a practical truth: Nigeria cannot legislate value addition without building the industrial system that makes it possible.
Over breakfast, the conversation began with cocoa. At lunch, it moved to minerals, machinery and industrial power. By dinner, we were discussing finance, European buyers and the uncomfortable possibility that a well-intentioned export restriction could harm the very Nigerian producers it was designed to support.
I am writing from Brussels, where I have been engaging with business leaders and institutional representatives attending the ongoing Nigeria Belgium Luxembourg Business Forum. Many have travelled from Nigeria to explore partnerships in agriculture, manufacturing, energy, maritime logistics, finance, technology and other sectors.
Amid the formal panels and scheduled business meetings, one subject has repeatedly found its way into our informal conversations: Nigeria’s proposed requirement that raw materials receive at least 30 per cent domestic value addition before export. I was amazed by how engaged the delegates were. They did not dispute the diagnosis behind the proposal. On the contrary, there was broad frustration with an economic structure in which Nigeria exports cocoa beans but imports branded chocolate; ships minerals abroad but purchases the machinery and industrial components produced from them; and supplies raw materials while employment, technology and processing margins accumulate elsewhere.
The desire to retain more value in Nigeria is real. It is not an abstract policy slogan. It is shared by entrepreneurs who want to manufacture, exporters who want to move up the value chain and professionals who understand the opportunities Nigeria loses when productive conversion happens elsewhere.
Yet the more we discussed the proposed legislation, the clearer the central question became:
Can Nigeria require value addition before it has built the factory, supplied the electricity, financed the machinery and secured the buyer?
The principle deserves support. The instrument requires careful design.
Breakfast and the cocoa question
Our breakfast conversation was particularly relevant in Belgium. Belgium occupies an important place in the international cocoa and chocolate economy. Nigerian cocoa enters European supply chains through ports, warehouses, traders and processors. Yet much of the highest commercial value is created after the commodity has left the producing country. Nobody around the table argued that this pattern should continue indefinitely.
But cocoa also illustrates why a universal percentage can create more questions than answers. What constitutes 30 per cent value addition? Is it measured by weight, production cost, market value or processing stage? Does fermenting, drying and grading cocoa qualify? Must beans be converted into liquor, butter or powder? Would finished chocolate be required? At which point has the statutory threshold been crossed?
The same difficulty appears across other commodities. Cutting and polishing a mineral is not equivalent to refining it into an industrial input. Processing sesame, cashew, timber or lithium requires different technologies, energy requirements, capital commitments and markets. A single percentage may offer political simplicity while producing commercial confusion.
My view, shared by several delegates, is that Nigeria needs commodity-specific value-chain assessments before imposing restrictions. For each product, the government should establish existing processing capacity, energy requirements, technology gaps, access to finance, viable markets and the time businesses will need to adjust. Thirty per cent may be achievable for one commodity, insufficiently ambitious for another and temporarily impractical for a third. Industrial policy must be bold enough to change behaviour but sophisticated enough to recognise different economic realities.
At lunch, electricity entered the conversation
By lunchtime, our conversation had moved from the legal requirement to the physical conditions of production. Factories do not run on legislation. Processing is energy-intensive. A Nigerian manufacturer operating with unreliable grid electricity and expensive self-generation may be legally required to add value but remain commercially unable to compete with a foreign processor enjoying dependable and cheaper power. This is not a theoretical concern.
Across Africa, governments are using export restrictions, tax incentives and access to mineral deposits to encourage local processing. Investors broadly understand the ambition. But they repeatedly identify affordable and dependable electricity as a decisive constraint. South Africa possesses enormous mineral reserves yet has lost much of its ferrochrome-processing capacity as electricity costs and reliability undermined competitiveness. Guinea has become a leading bauxite producer but will need several times its present electricity generation to realise its aluminium-processing ambitions.
The lesson for Nigeria is straightforward. For every commodity made subject to a processing obligation, the government should publish an accompanying industrial-capacity plan. It should address electricity, water, industrial land, transport, storage, waste management and access to the relevant technology. Otherwise, the policy would not create value addition. It would simply transfer Nigeria’s infrastructure deficit to producers and exporters. Power must precede prohibition.
The machinery still needs finance
Finance became the next subject. Domestic processing requires machinery, construction finance and working capital. Exporters must hold inventory through longer production cycles. Small farmers and artisanal producers need aggregation systems capable of delivering consistent volumes and quality. Yet the structure of Nigerian finance remains poorly suited to long-term industrial development.
A processor cannot sensibly finance machinery with short-term, high-cost credit. An international investor cannot price a twenty-year project if electricity tariffs, export rules or foreign-exchange arrangements may change after construction begins. The Federal Government has said that private capital should finance Nigeria’s next phase of growth rather than additional sovereign borrowing. That is a reasonable objective. But private investors will not finance industrial transformation merely because the government prefers private capital. They will require investable projects, appropriate finance, capable counterparties, predictable rules and credible routes to market.
Nigeria must therefore connect the value-addition proposal to credit guarantees, equipment leasing, development-finance facilities, export credit and blended-finance structures. The purpose should not be to subsidise factories indefinitely. It should be to bridge the difficult period between industrial ambition and commercially sustainable production. This is also where Belgian and Luxembourg institutions can contribute. Belgium brings industrial technology, logistics, commodity-market knowledge, and access to European buyers. Luxembourg brings expertise in investment funds, cross-border finance and structured capital. But those capabilities must be organised around real projects, not general expressions of interest.
Dinner and the danger facing primary producers
Our dinner discussion turned to the people most likely to be overlooked: farmers, miners and other primary producers. An export restriction introduced before domestic processors can absorb available production may reduce competition for raw materials. Farm-gate or mine-gate prices could fall. Large processors might gain access to captive supply while smaller producers lose the option of selling to foreign buyers. That would transform a policy presented as economic sovereignty into a transfer of income from primary producers to protected processors. Nigeria must not allow that to happen.
Before applying restrictions, the government should conduct transparent domestic-capacity tests. If local processors cannot purchase available production at commercially reasonable prices, producers should retain access to export markets. Independent monitoring should publish domestic processing capacity, utilisation rates, purchasing volumes, producer prices, and export demand. The purpose of value addition is to enlarge national income. It is not to redistribute existing income towards a small group of industrial beneficiaries.
My conversations with European counterparts
The responsibility does not rest with Nigeria alone. In my conversations with European counterparts during the forum, I have made the point that Europe cannot praise African industrialisation while preserving commercial arrangements that favour the importation of unprocessed African commodities. European buyers can support processing in Nigeria through long-term purchase agreements. Equipment manufacturers can provide training, maintenance and local assembly. Financial institutions can offer patient capital and risk-sharing. Importers and standards bodies can help Nigerian companies meet European safety, traceability and environmental requirements before new factories begin production.
Belgium is particularly relevant. Its ports, cocoa industry, commodity-trading networks, industrial engineering, and logistics capabilities connect directly to Nigerian value chains. However, a fair industrial partnership must go beyond selling European machinery into Nigeria. It should develop Nigerian suppliers, train engineers, transfer knowledge and guarantee meaningful market access for the processed products those factories eventually produce. Fair trade is not achieved merely when Africa processes more. It is achieved when African processed goods can enter valuable markets and compete on reasonable terms.
Not every factory must be national
Another point arising from our discussions concerned regional scale. Not every African country can efficiently process every commodity. Some industrial facilities require volumes, power and markets larger than one national economy can provide. AfCFTA should therefore form part of the value-addition architecture.
Nigeria could host facilities supplied partly by neighbouring producers. Another African country may develop specialist processing capacity serving Nigerian enterprises. Regional power pools, transport corridors, and harmonised standards can make investments viable where isolated national projects cannot. The objective should be African value addition. It should not be 54 countries attempting to reproduce every stage of every value chain. Economic sovereignty is strengthened through strategic interdependence, not industrial isolation.
The conversation after the forum
The engagement of our delegates has convinced me that Nigeria’s business community is ready for a serious value-addition conversation. These entrepreneurs are not asking to preserve an extractive economic model. Many want to manufacture, process and export higher-value goods. They understand that Nigeria cannot achieve prosperity by remaining principally a supplier of raw materials. But they also know from experience that ambition without infrastructure becomes another cost imposed on enterprise.
Nigeria’s proposed legislation begins with the correct diagnosis. Exporting unprocessed resources indefinitely will not create the jobs, technology, and productive capabilities the country needs. But diagnosis is not execution. A functioning value-addition strategy requires a complete conversion chain: Raw-material endowment, reliable power, processing technology, appropriate finance, skilled operators, competitive logistics, verified standards, committed buyers and measurable national value.
Break any link and the percentage mandate may become an obstacle rather than an industrial policy. Nigeria should therefore implement the proposed requirement gradually and commodity by commodity. It should publish capacity assessments, protect primary producers, provide realistic transition periods and connect export restrictions to measurable infrastructure and financing milestones.
As we break into two groups for company visits, one heading for Antwerp to take a tour around cocoa handling, warehousing, and logistics, and the other heading for Kortrijk to visit technology, innovation, and industrial hubs, I hope the Couch Conversation will be consistent. Success should not be measured by the volume of raw exports prevented. It should be measured by factories operating, workers trained, domestic suppliers developed, processed products exported, and national income increased. As our breakfast, lunch, and dinner conversations repeatedly reminded me, 30 per cent can be written into legislation. The factory, the electricity, the finance, and the market must still be built.
. Nweke is an International Trade Consultant and author of Economic Diplomacy of the Diaspora. A former Belgian politician of Nigerian origin, born in Igbuzo, Delta State, Nigeria, he was a 2014 candidate for Member of the European Parliament. A third-term Municipal Legislator at Ostend City Council, Belgium, since 2006, his portfolio included the Economy, Social Policy, Equality Affairs and International Development. Collins features regularly on TV Continental Lagos as Global Affairs Analyst, on Channels TV as Foreign Policy Commentator, on TRT World Istanbul as African Affairs Analyst, among other Afrocentric media houses, including BusinessDay Nigeria