Raw materials export soars, despite push for local processing

Nigeria’s efforts to promote value-added exports appear to be facing serious setbacks, as exports of unprocessed raw materials surged to N2.9 trillion in the first nine months of 2025. According to data from the National Bureau of Statistics, this represents a 147.4% increase compared to N1.174 trillion recorded in the same period of 2024. The rise was consistent across all three quarters of 2025, with each quarter significantly exceeding figures from 2024. The 2025 total is also more than five times the N564.73 billion recorded in the first nine months of 2023, showing a dramatic upward trend in raw material exports.

Major non-oil exports during the period included cocoa beans, raw cashew nuts, sesame seeds, ginger, rubber, palm kernel oil, raw lead ores, urea, and non-monetary gold in powder form. Key trading partners were India, Spain, and the Netherlands. However, this sharp increase contradicts government policies aimed at reducing the export of unprocessed commodities and encouraging local processing to boost industrialisation, create jobs, and conserve foreign exchange.

Over the years, the government has introduced several initiatives to promote value addition. These include banning the export of certain raw materials in specific sectors, aligning export incentives so that only processed goods benefit (with involvement from the Central Bank of Nigeria), and promoting local content through backward integration. These policies are designed to strengthen Nigeria’s industrial base and reduce reliance on imported finished goods.

One of the most significant recent efforts is a proposed bill championed by the Raw Materials Research and Development Council (RMRDC), which seeks to mandate a minimum of 30% local value addition before any raw material can be exported. The bill, currently before the National Assembly, proposes a 15% levy on exporters who fail to meet the processing requirement, and possible suspension of their value addition certificates. The legislation aligns with a 2009 ECOWAS directive promoting value addition for duty-free exports within the sub-region.

Government officials strongly support the bill. The Director General of RMRDC, Prof. Martin Muonso, emphasized that the law would halt the export of unprocessed goods and stimulate domestic industries. Former Minister of Innovation, Science and Technology, Uche Nnaji, previously introduced a 10-year roadmap targeting 60% value addition by 2034, developed in collaboration with the African Development Bank. The current minister, Dr. Kingsley Udeh, also described the proposed legislation as a turning point that would protect jobs and strengthen local industries. Similarly, the Chairman of the Nigeria Revenue Service (NRS), Zacch Adedeji, warned that exporting cheap raw materials while importing expensive finished goods weakens the naira and fuels inflation.

Stakeholders, including the Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI), expressed concern over the trend. MAN stressed that exporting raw materials leads to job losses, reduced technological advancement, and limited economic diversification. LCCI described the situation as a “mixed development”: while the increase boosts foreign exchange earnings in the short term and reflects strong international demand, it raises concerns about Nigeria’s long-term industrial growth and sustainability.

In summary, despite strong policy measures and proposed legislation aimed at boosting local processing and industrialisation, Nigeria is witnessing a sharp rise in the export of unprocessed raw materials. While this brings short-term foreign exchange gains, many experts warn that without significant investment in infrastructure, stable power supply, and affordable financing, the country may continue to lose the greater economic benefits that come from value-added production.