Nigeria must have domestic processing capacity before imposing export restrictions on primary products – Yusuf
CHIEF Executive Officer of Centre for Promotion of Private Enterprise, Dr Muda Yusuf, says in the light of Nigeria’s push for value-addition, the nation must ensure it has adequate, efficient, and competitive domestic processing capacity before imposing export restrictions on primary products.
In a statement sent to Economy Post on Sunday morning, Dr Yusuf said where such foundational capacity is absent, compulsory value-addition policies risk generating distortions across commodity markets and imposing significant hardship on actors within the primary production value chain.
“This concern is particularly critical in the context of the strong momentum recorded by Nigeria’s non-oil export sector over the past two years, driven largely by foreign-exchange reforms that strengthened export incentives and competitiveness. Premature or poorly sequenced value-addition mandates could undermine these hard-won gains,” he said.
In late November 2025, Minister of Innovation, Science and Technology, Mr Kingsley Udeh, outlined the Nigerian government’s plan to mandate a 30 percent value-addition on all raw materials prior to export, describing the initiative as “one of the most significant steps towards the industrialisation of Nigeria.”
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According to Mr Udeh, the matter will soon become a law in Africa’s most populous nation, noting that “before any of our natural wealth in the form of raw materials is exported, at least 30 percent value will be added to such resources, natural wealth, or raw materials.”
Yusuf urges caution
However, Dr Yusuf has urged caution, stressing that compulsion must follow capacity, not precede it. He said domestic processing should emerge organically from the capacity of processors to purchase primary products at prices reflective of international market realities.
He urged Nigerian policy makers to factor in competitive production costs relative to global benchmarks; presence of reliable infrastructure—especially power, transportation, and other logistics; access to finance at low interest rates; modern technology; as well as efficient commercial linkages between producers and processors.
Nigeria’s export components
However, statistics supports the policy. Most of Nigeria’s export products are raw materials which find themselves in the factories in Europe, the Americas and other continents.
In the first quarter (Q1) of 2025, Nigeria exported goods valued at N20.598 trillion. Exports of agricultural goods over the period amounted to N1.704 trillion, representing a 64.65 percent rise from N1.035.02 trillion in the corresponding period of 2024 and a 10.63 percent increase from N1.540.46 trillion in the fourth quarter (Q4) of 2024, according to official data by the National Bureau of Statistics (NBS).
The value of raw material exports in Q1 2025 stood at N1.044.59 trillion, representing a 196.12 percent increase from N352.75 billion in Q1 2024 and 55.65 percent from N671.12 billion in Q4, 2024. Solid mineral exports in Q1 2025 were valued at N58.87 billion, but the value of manufactured goods exports stood at merely N294.43 billion. This implies that the value of potential inputs in export destinations was 14 percent, while that of manufactured goods was just 1.43 percent. Solid minerals, agricultural products and raw materials aare potential inputs for European and American factories.
In the second quarter (Q2) of 2025, total exports stood at N22.751 trillion, reflecting a 28.43 percent rise compared to N17.714 trillion billion in the corresponding quarter of 2024, according to the NBS. Exports of agricultural goods over the period under review amounted to N1.256 trillion, while the value of of raw material exports stood at N819.72 billion. The value of solid mineral exports stood at N77.31 billion, but that of manufactured goods exports stood at N803.81 billion. Hence the value of potential raw materials stood at 9.4 percent, while that of finished manufactured goods export was just 4 percent.
Similarly, total exports in the third quarter (Q3) of 2024 were valued at N20.486.39 trillion, the NBS data shows. Exports of agricultural goods was valued at N1.256 trillion, while that of raw material stood at N819.72 billion. The value of solid mineral exports stood at at N77.31 billion, but that of finished manufactured goods was put at N803.81 billion. In other words, the value of potential inputs was 11 percent, while that of manufactured goods export was 4 percent.
The NBS is yet to release foreign trade statistics in Q4 of 2025.
Issues beyond numbers
Dr Yusuf, however, said restricting the export of raw commodities in the absence of adequate domestic processing demand artificially constrains the market and often results in excess local supply. It will also penalise players in the primary production value chain, while deepening poverty and vulnerability in agrarian communities.
It will also result in the loss of competitiveness in the global market, while leading to the loss of investor confidence, he argued. “Sudden, arbitrary, or premature value-addition mandates heighten perceptions of regulatory risk, discourage investment across commodity sectors, and weaken confidence in Nigeria’s non-oil export environment,” he said.
“Processing capacity, efficiency, and competitiveness must precede compulsion. Reversing this order risks suppressing primary-product prices, penalizing rural producers, discouraging aggregators and weakening export performance.
“Sustainable industrialisation is achieved by building competitive capacity that enables Nigerian processed products to succeed locally and globally on the strength of efficiency, quality, and cost competitiveness. A balanced, inclusive, and capacity-driven strategy will deliver credible export growth, resilient rural livelihoods and durable industrial development for Nigeria.”
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About the Author
Odinaka Anudu
Editor and Managing Editor
Lagos, Nigeria
Odinaka Anudu is a seasoned journalist with nearly two decades of journalism experience. He has won 19 journalism awards and written thousands of stories for both local and international platforms. He has worked in eight different media organisations and travelled widely in various capacities. He is an investigative journalist, a newsroom leader, mentor and lecturer.
