{"id":13615,"date":"2025-04-21T19:15:52","date_gmt":"2025-04-21T19:15:52","guid":{"rendered":"https:\/\/thenewsnow.org\/?p=13615"},"modified":"2025-04-21T19:15:52","modified_gmt":"2025-04-21T19:15:52","slug":"cppe-kicks-against-raw-materials-bill","status":"publish","type":"post","link":"https:\/\/thenewsnow.org\/index.php\/2025\/04\/21\/cppe-kicks-against-raw-materials-bill\/","title":{"rendered":"CPPE KICKS AGAINST RAW MATERIALS BILL"},"content":{"rendered":"

The Raw Materials<\/span><\/span> Research and Development Council (RMRDC)<\/span><\/span>\u00a0Bill <\/span><\/span>currently <\/span><\/span>before the National Assembly has the pro<\/span><\/span>s<\/span><\/span>pect of creating significant adverse and unintended <\/span><\/span>consequences<\/span><\/span> for <\/span><\/span>Nigerian<\/span><\/span>exporters and manufacturers.<\/span><\/span><\/p>\n

The bill currently proposes as follows:<\/span><\/span><\/p>\n

\u2022 <\/span>That no primary products exports should take place unless there is a minimum of 30% local value addition.<\/span><\/span><\/div>\n
\u2022 <\/span>That manufacturers will not be allowed to import raw materials that are available in sufficient quantity in the country.<\/span><\/span><\/div>\n

On <\/span><\/span>the face of it, the idea<\/span><\/span> of promoting local value addition is good for the economy and potentially <\/span><\/span>enhances the<\/span><\/span> chances of better earnings from our exports. But the policy has to ensure a balance between the <\/span><\/span>interests<\/span><\/span> of exporters of prim<\/span><\/span>ary products and the processors<\/span><\/span>. It is also imperative to undertake a robust study on domestic raw materials availability before legislating on a ban on raw materials for manufacturers.<\/span><\/span> \u00a0<\/span><\/span>What is needed is a win<\/span><\/span>-win<\/span><\/span>proposition, not a <\/span><\/span>zero-sum<\/span><\/span> game. <\/span><\/span>The curr<\/span><\/span>ent proposal in the bill will<\/span><\/span> penalize exporters in the country, most of whom export primary products. <\/span><\/span>Thousands of jobs in the<\/span><\/span> primary <\/span><\/span>products export<\/span><\/span> supply chain <\/span><\/span>would be put <\/span><\/span>at risk.<\/span><\/span> \u00a0<\/span><\/span>The major <\/span><\/span>non-oil<\/span><\/span> exports <\/span><\/span>are:<\/span><\/span> cocoa beans and cocoa <\/span><\/span>butter, <\/span><\/span>cashew nuts, Gum Arabic, Ginger, sesame seeds, shea butter. \u00a0<\/span><\/span>Even crude oil export is still a major component of <\/span><\/span>Nigeria’s<\/span><\/span> export. Until recently, domestic refining capacity was nil.<\/span><\/span><\/p>\n

This proposition raises a number of questions.<\/span><\/span><\/p>\n

\u2022 <\/span>What metrics would be used to determine the minimum 30% value addition.<\/span><\/span><\/div>\n
\u2022 <\/span>Who will determine and give approval for the export to proceed.<\/span><\/span><\/div>\n
\u2022 <\/span>What study has been done to determine the local processing capacity for each category of primary products<\/span><\/span> currently<\/span><\/span> been exported<\/span><\/span>.<\/span><\/span><\/div>\n
\u2022 <\/span>What metrics would be used to determine raw materials that manufacturers would be allowed to import into the country.<\/span><\/span><\/div>\n
\u2022 <\/span>What is the effective time frame for <\/span><\/span>implementation?<\/span><\/span><\/div>\n
\u2022 <\/span>Is it within the mandate of the RMRDC to be promoting the ban of exports or imports?<\/span><\/span><\/div>\n

The position of the CPPE is that this bill raises more questions than answers. \u00a0It <\/span><\/span>is a very simplistic <\/span><\/span>proposition<\/span><\/span> which has not taken into account the critical challenges of manufacturing, <\/span><\/span>processing<\/span><\/span> and value addition in the Nigerian economy. \u00a0These contextual understanding is very critical to enrich the conversations around the raw materials bill. \u00a0Most agro processors have collapsed not so much because of the raw <\/span><\/span>materials<\/span><\/span> availability, but <\/span><\/span>the challenges<\/span><\/span> of productivity and <\/span><\/span>competitiveness<\/span><\/span>.<\/span><\/span><\/p>\n

Production costs are prohibitive. <\/span><\/span>The cost of energy, cost of funds, logistics cost, bureaucratic <\/span><\/span>bottlenecks<\/span><\/span>, <\/span><\/span>exchange rate, <\/span><\/span>multiple taxation etc. \u00a0T<\/span><\/span>hese <\/span><\/span>are bigger issues that needs to be addressed to <\/span><\/span>promote<\/span><\/span> value addition. We should be <\/span><\/span>causative<\/span><\/span> in our approach <\/span><\/span>to solving problems and <\/span><\/span>focus less on the symptoms.<\/span><\/span><\/p>\n

If <\/span><\/span>passed,<\/span><\/span> the bill <\/span><\/span>would create new corruption gateways in the bureaucracy as <\/span><\/span>businesses<\/span><\/span> will now be burdened with another chain of approvals. \u00a0<\/span><\/span>Additionally, the issue of export or import ban is not within the remit of the <\/span><\/span>Raw Materials Research<\/span><\/span> and <\/span><\/span>Development Council<\/span><\/span> or the <\/span><\/span>Ministry<\/span><\/span> of <\/span><\/span>Science<\/span><\/span> and <\/span><\/span>Technology<\/span><\/span>. \u00a0It is <\/span><\/span>in <\/span><\/span>the realm of fiscal policy which is within the purview of the Ministry of Finance, <\/span><\/span>working in collaboration with the <\/span><\/span>Ministry<\/span><\/span> of <\/span><\/span>National Planning<\/span><\/span>and the <\/span><\/span>Ministry<\/span><\/span> of <\/span><\/span>Industry,<\/span><\/span> Trade and I<\/span><\/span>nvestment. \u00a0And in this particular instance, the <\/span><\/span>Nigeria Export <\/span><\/span>Promotion<\/span><\/span> Council [<\/span><\/span>NEPC<\/span><\/span>]<\/span><\/span> must<\/span><\/span> be in the loop. \u00a0This is essential to determine the implications for the <\/span><\/span>non-oil<\/span><\/span> export sect<\/span><\/span>or and the manufacturing sector and the economy as whole<\/span><\/span>. It is also important for policy coordination<\/span><\/span><\/a> and coherence.<\/span><\/span><\/p>\n

Import and export regulations are not often legislated. \u00a0<\/span><\/span>They<\/span><\/span> are trade po<\/span><\/span>licy issues which are calibrated <\/span><\/span>from time to time by the fiscal <\/span><\/span>policy<\/span><\/span> authorities<\/span><\/span> in the light of prevailing economic conditions<\/span><\/span>. \u00a0It is not a matter for the national <\/span><\/span>assembly<\/span><\/span> to legislate upon. \u00a0Trade policies are also <\/span><\/span>meant<\/span><\/span> to be flexible, <\/span><\/span>which is why they are<\/span><\/span> not often a subject of legislation.<\/span><\/span><\/p>\n

We therefore submit that the national assembly should discontinue deliberations on the bill and encourage the raw material research and development council to focus on its core mandate of raw materials research to offer most cost effective raw materials option for manufacturers. \u00a0The <\/span><\/span>council involvement in trade policy matters is an aberration. \u00a0<\/span><\/span>Besides, the <\/span><\/span>bill has very weak value proposition.<\/span><\/span> The CPPE advises the RMRDC to withdraw the bill.<\/span><\/span><\/p>\n

\n

DR MUDA YUSUF<\/span><\/span><\/p>\n

DIRECTOR\/CEO<\/span><\/span><\/p>\n

CENTRE FOR THE PROMOTION OF PRIVATE ENTERPRISE [CPPE]<\/span><\/span><\/p>\n

21<\/span><\/span>ST<\/span><\/span> APRIL 2025<\/span><\/span><\/p>\n

\n

\n","protected":false},"excerpt":{"rendered":"

The Raw Materials Research and Development Council (RMRDC)\u00a0Bill currently before the National Assembly has the prospect of creating significant adverse<\/p>\n","protected":false},"author":1,"featured_media":13096,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-13615","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/posts\/13615","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/comments?post=13615"}],"version-history":[{"count":1,"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/posts\/13615\/revisions"}],"predecessor-version":[{"id":13616,"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/posts\/13615\/revisions\/13616"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/media\/13096"}],"wp:attachment":[{"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/media?parent=13615"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/categories?post=13615"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/tags?post=13615"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}