President Bola Ahmed Tinubu’s administration is targeting a 17 per cent year-on-year growth in real output, thereby pursuing an increase in real Gross Domestic Product (GDP) to N23.2 trillion by implementing a new Bill mandating 30 per cent value addition to raw materials before export.
One of the premises of this target is that, according to the Nigerian National Bureau of Statistics (NBS), Nigeria’s real GDP in 2024 averaged N19.83 trillion, when Quarter-on-Quarter performance stood at N18.28 trillion, N18.29 trillion, N20.12 trillion, and N22.61 trillion for Q1 to Q4 of the preceding year.
Last year, the real GDP grew by 3.87 per cent. Therefore, an increase of 17 per cent in the average real output would push GDP to N23.2 trillion. It is an ambitious target, but achievable if the foundation and strategic pillars are properly set; and if the process of legislation is appropriate, and the consequent policy is well implemented, end-to-end.
In my view, this is a very important step in the right direction. I am therefore in support of the Bill.
As the engine room of incubation and development of innovation and materials and in Nigeria; the Raw Materials Research and Development Council (RMRDC), will play a key ‘focal point’ role to upscale the value of our production, industrial growth to international standards and more importantly to make our products to be effectively competitive, sellable and acceptable. This will surely add value to our export earnings, enable the achievement of the ‘Nigeria First’ policy of President Bola Tinubu, and consequently significantly upscale our GDP by ensuring sustainability.
Accordingly, over a year ago, on July 2, 2025, the Senate approved an amendment to the Raw Materials Research and Development Council Act, 2022, which will mandate that exporters must process at least 30% of raw materials locally before exporting.
While the bill is undergoing legislation, I reiterate (as I have stated in other forums) that the following key points should be noted:
The value addition policy and Nigeria’s competitiveness in the global market:
According to a Global Competitiveness Report published by the World Economic Forum, Nigeria scored 48.33 points out of 100 (48.33%) in 2019. Before then, the Competitiveness Index in Nigeria averaged 13.81 Points from 2007 until 2019, reaching an all-time high of 48.33 Points in 2019 and a record low of 3.37 Points in 2011. These are key indications of how important the value addition policy will be to upscaling the competitiveness of Nigeria’s products and services in the continental and global arena.
If the value addition policy is successful, our products and services will be more competitive in the international market. For example, in the agriculture sector, fruits, vegetables, and even flowers from Kenya, Morocco, South Africa, India, etc., are very competitive in the international market. But Nigerian exporters are not competitive due to value addition, post-harvest/post-production challenges like poor storage, poor logistics and supply chain infrastructure and systems, use of some pesticides during planting or post-harvest, etc.
Consequently, a lot of Nigerian products and services are rejected or underpriced. Therefore, the value addition is a welcome development if properly formulated, and more importantly, if the policy is well implemented.
Reversing trade deficits to become a trade surplus:
Essentially, Nigeria cannot achieve its social and economic objectives by just exporting raw materials, products, and services without processing and/ or value addition. I also strongly believe that the value addition policy, if properly implemented, will significantly change Nigeria’s trade deficits to become trade surpluses, and make the country more competitive in international trade and investment. This will significantly increase foreign exchange earnings and foreign direct investments in the real critical sectors of the economy.
Technology transfer and job creation:
Furthermore, the value addition policy will anchor foreign investors to situate their industries within Nigeria, thereby ensuring employment for our teeming youth, ensuring technology transfer and achieving economic values within the country and exports with concomitant effect on our economy, while also ensuring sustainability.
Standardisation:
In my view, during the process of Legislation, some germane questions should be addressed as stakeholders distill the ‘30%’ value addition within the framework of the Bill. For example; What are the standards? What makes up 30% value addition, in terms of the products? What are the standards for that 30% value addition? Because, again, in my view, value addition should also encompass storage, logistics and supply chain, infrastructure, facilities, and systems, etc. For example, in the case of agri-products, the quality of most products degrades by the time you move the products to the seaport or airport for export. This is notwithstanding the processing and value-addition on to the products. Therefore, the products (especially fruits and vegetables, and other perishables) will not be competitive, or will not even be sellable or acceptable in the global market.
Accordioning, I hope that there will be clear definitions and boundaries of standards with regard to value addition and processing. It is also crucial that almost all our national policies key into an overarching national development strategy, in terms of industrialization, trade, and investment, etc. Thus, there should be policy coordination and policy coherence as the Bill undergoes legislation, such that when enacted into law, the policy will not be in conflict with other Bills or policies that are already in place, and if so, for a realignment or streamlining to be done, so as to ensure success.
Infrastructure:
Infrastructure is crucial to the achievement of this very laudable bill. Particularly, logistics and supply chain platforms and systems (land, sea, and air), intermodal transportation networks, storage, etc., are also key to the success of the value addition policy. As an illustration, the Food and Agriculture Organization (FAO) of the United Nations has stated that over 50% of the agricultural products we produce in Nigeria get wasted from the farmland to the market or even to the dining table. Therefore, value addition and bridging the infrastructure deficit are crucial to our national economic diversification strategy, achieving the N2.3 trillion GDP, and also achieving the $1 trillion economy target set by President Bola Ahmed Tinubu. So, I hope that the foundation laying and the strategic pillars setting will key into an overarching national strategy, so that we are moving lockstep in the right direction, to achieve successful legislation and passage of this laudable Bill, and effective implementation.
Power/ energy as a sine qua non:
Earlier on, I stated that value addition and processing, cannot be achieved without infrastructure in terms of power. Nigeria is lagging far behind in terms of meeting its power/energy requirements for any meaningful economic turnaround, growth, and development.
Last year, President Tinubu signed into law, the legislation that enables all the 36 states and the Federal Capital Territory, to generate, transmit, and distribute their power/energy capacities to drive socio-economic development. Thus, Nigerians want to see value innovation by the governors. We also expect decisiveness by the federal and state governments in result-oriented moves to ensure that we have enough power/ energy that will recover and sustain our industrial sector, and the Micro-Small-and-Medium Scale Enterprises (MSMEs) in the short to mid-term, even if it is in a phased fashion. Our expectation is that governments at the federal and state levels are able to generate, distribute, transmit, and more power/energy for industries.
Infrastructure connectivity and interlinks:
Furthermore, as stated earlier, the other critical infrastructure, i.e., intermodal transportation, rural feeder roads and bridges, logistics and supply chain, are critical to the success of the value addition policy. When production/ processing/value addition is completed, the efficient and safe movement of products from production location to the market, whether domestic or international, is also critical in the value chain. Therefore, the qualities and standard of the road network, and airports (passenger and cargo) we build, should fit into our short to long-term socio-economic visions and strategies to support and sustain the economy. It is very important for us to also have effective interlinks between land, air, and sea transportation systems so that we are able to succeed in a timely and coordinated manner.
In conclusion, I advise that there should be policy consultation, and policy coherence so that there are efficient and effective synergies coordination across; Ministries, Departments and Agencies (MDAs), to ensure success and achievement of the desirable objective(s), i.e., national economic recovery, economic growth, and sustainable economic development.