On Tuesday, the Senate passed for second reading a bill requiring at least 30% domestic processing of raw materials before they can be exported.
Titled “A Bill for an Act to Amend the Raw Materials Development Council Act, 2022 to Make Provision for Processing and Local Protection and Related Matters, 2024,” the proposed legislation was sponsored by Senator Peter Nwebonyi, representing Ebonyi North.
During the debate, Nwebonyi highlighted the bill’s objectives, including boosting local manufacturing, creating jobs, and reducing reliance on imports.
He emphasised that the legislation would ensure no raw material is exported without undergoing a minimum of 30% domestic processing, adding that this would strengthen the Naira, encourage industrial innovation, and enhance the value of local industries.
The senator argued that the bill, if passed into law, would protect Nigerian manufacturers from foreign competition by regulating the importation of raw materials that can be locally produced. “This initiative will create a favorable environment for domestic companies to thrive and foster economic independence, similar to developed nations like China and the United States,” Nwebonyi said.
While the bill received significant support from lawmakers, it also sparked cautionary responses. Senator Olalere Oyewumi, representing Osun West, expressed concerns about local industries’ capacity to process raw materials.
He noted past challenges in the oil sector, where crude oil was exported due to insufficient local refinery capacity. “If we assume that all products should not be exported raw, what happens if we don’t have companies to process them locally?” Oyewumi asked.
He also highlighted cocoa as an example, pointing out that less than 10% of cocoa produced in Nigeria is processed locally due to a lack of facilities.
“Imposing a blanket ban on raw exports without building sufficient local capacity could harm farmers who rely on production. The process must be gradual to allow industries to catch up,” he warned.
Following the debate, Senate President Godswill Akpabio conducted a voice vote, and the majority supported the bill’s progression to a second reading. It was subsequently referred to the Senate Committee on Agricultural Production, which is expected to report back within six weeks.
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