Proposed law aims to boost manufacturing, protect local industries, and reduce overdependence on imports
The Senate has passed for second reading a bill requiring at least 30% local processing of raw materials before export.
The proposed legislation, 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,” was sponsored by Senator Peter Nwebonyi of Ebonyi North.
In his argument for the bill, Nwebonyi stated that the law is designed to enhance local manufacturing, create jobs, and decrease reliance on imports. He emphasized that the bill would mandate that no raw materials leave Nigeria without undergoing at least 30% processing locally.
“Promoting local processing to a minimum of 30% or more will strengthen the economy, support the Naira, and drive innovation in domestic industries,” Nwebonyi said.
He added that the initiative would significantly boost local industries and regulate the importation of raw materials that can be produced within Nigeria.
“This bill will protect Nigerian manufacturers from foreign competition by limiting imports of materials we can produce locally. It will create a better environment for domestic companies to grow and foster economic independence, much like what is seen in developed countries such as China and the United States,” he said.
While many lawmakers supported the proposal, others expressed concerns about its feasibility.
Senator Olalere Oyewumi, representing Osun West, highlighted potential challenges, particularly regarding the readiness of local industries to handle large-scale processing of some raw materials.
“Over the years, Nigeria has been producing oil but lacked operational refineries, leading to the export of crude oil. Now, with local refineries functioning, they serve domestic industries. However, applying a blanket restriction on raw exports could cause issues if we don’t have adequate local processing capacity,” he cautioned.
He cited cocoa production as an example, noting that while the South West produces large quantities, less than 10% is processed locally due to insufficient industrial capacity.
“If we enforce this policy without ensuring local industries are equipped, it could harm farmers who depend on exports. The process must be phased in gradually to allow industries time to adapt,” Oyewumi explained.
After deliberation, Senate President Godswill Akpabio put the bill to a voice vote, with a majority of lawmakers supporting its progression.
The bill has been referred to the Senate Committee on Agricultural Production, which is expected to report back within six weeks.
