Nigeria has no reason to export cocoa, soya beans, oranges – RMRDC DG

The Director-General of the Raw Materials Research and Development Council (RMRDC), Prof. Nnanyelugo Ike-Muonso, has stated that Nigeria has no justification for exporting agricultural products like cocoa, soya beans, and oranges.

He, however, assured that the proposed Raw Materials Processing and Local Production Protection Bill, currently before the National Assembly (NASS), would eliminate unnecessary exports and imports of products.

Ike-Muonso made this statement on Friday at the launch of the Quarterly Statistical Bulletin Series by the RMRDC in Abuja.

The report provides valuable insights into Nigeria’s trade performance, raw material utilization, and economic opportunities.

The RMRDC DG lamented that Nigeria’s manufacturing sector contributes only about three percent of the nation’s foreign exchange earnings, and over 30 percent of the country’s import bill is linked to raw materials and intermediate goods that could otherwise be sourced locally.

He expressed surprise that despite being a leading exporter of raw materials such as cocoa, ginger, and tin, Nigeria continues to rely heavily on imports of processed derivatives, including cocoa butter and ginger powder.

He noted that the council’s report indicated that derivatives from ginger, soya beans, sunflower seeds, and cocoa are critical agricultural products imported into the country, even though Nigeria has a comparative advantage and the potential to harness or produce them locally for user industries.

According to him, this situation is unsustainable, adding that the solution lies in promoting local sourcing, harnessing abundant natural resources, and developing innovative value chains.

Professor Ike-Muonso said: “In Nigeria, we discovered that we export plenty of oranges and import plenty of orange concentrate. So, you ask yourself why we need to export oranges and import the same. Our bill will stop this.

“So, you see the same item exported in large quantities and also imported in just slightly improved form. Take cocoa, for instance, you can see the export quantity and value.

“Now, look at what we can derive from cocoa. We can get cocoa butter, cocoa powder, chocolate, and other food preparations that contain cocoa.

“And now, when you compare the imports, we discover that we are not supposed to even export this cocoa at all. Because about 26 percent of this is wasted. This is what we are depriving local industries. Small industries that should use cocoa in making things.

“In fact, when we met with the Manufacturers Association of Nigeria (MAN) last month, one man said they don’t have any company utilizing cocoa raw material at all for now. Because what happens is that all our cocoa is exported raw. So, this data tells you there’s a 26.5 percent level of deprivation.

“And it’s worse for ginger. It’s 83 percent deprivation. However, that may not be the case for cashew, maybe because we don’t have well-developed competencies in cashew production or utilising cashew.

“I don’t know. But as we progress in collecting data, we will improve on the information. If you look at soya beans, we don’t have any business exporting soybeans at all.

“About 62 percent of our business is deprived of the raw materials that soya beans provide because we’re exporting soya beans.”

He said the Raw Materials Processing and Local Production Protection Bill will ensure that no one exports raw materials in their raw form without at least a 30 percent value addition.

He added, “That issue is coming up for public debate because you can see precisely why people are unemployed. You can see precisely why the Naira is where it is. This is simple data.

“So, I’m saying it’s not about the size, but about the importance of the information. The content. We need to tell the Nigerian people how they are destroying themselves and how we can support this council to achieve these objectives.”

Noting that the economic survival of Nigeria lies in the prosperity of RMRDC, Ike-Muonso called on those who seek economic prosperity for Africa to support the bill.

He added that instead of depending on exporting products and minerals in their raw forms, Nigeria should find a way of increasing exports of semi-processed goods or semi-processed raw materials.

“It doesn’t need to be fully processed. Any level of value addition creates employment. Any level of value addition improves the exchange rate.

“So, let the negotiation be on the acceptability of our semi-processed form. All developed countries, you can go and check them, have had these forms of protectionism. There’s no country developed on earth that didn’t go through that.

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“For instance, if we as a country say our cashew cannot go out unless they are shelled. Some people shell it. Those who are shelling it will have employment. Or we say our cashew cannot go out unless you extract the oil. Once we begin that kind of argument, it begins to change the narrative. And it even increases our exports,” he said.

According to the RMRDC DG, data from the Manufacturers Association of Nigeria (MAN) reveals that in the first three quarters of 2024, local raw material utilization in the manufacturing sector stood at 56.03 percent, 56.70 percent, and 57.6 percent, respectively.

He noted that while these numbers signify progress, they highlight the vast untapped potential for local sourcing and value addition.

The report, which covers data from the first quarter of 2024, further noted that while petroleum oil remains the most utilized mineral in Nigeria, there is a critical need to improve local processing and value addition.

“Currently, Nigeria’s value addition rate stands at 25 percent, with projections indicating that increasing this rate could lead to a 15.6 percent rise in employment, a 2.2 percent boost in industrial output, and a 21.25 percent improvement in the exchange rate against the dollar,” the report stated.

To address the imbalance between raw material exports and local consumption, the RMRDC called for the development of local industries capable of adding value to materials before export.

The report also revealed Nigeria’s continued dependence on imports, especially in the energy sector.

Total imports in the first quarter of 2024 were valued at N2.3 trillion, with energy materials accounting for over N1.5 trillion of the total. This highlights the nation’s vulnerability to external supply chains and the need to optimize the use of domestic resources.

In addition to petroleum, agricultural and mineral raw materials play significant roles in Nigeria’s trade balance.

For example, agricultural exports totaled N226 billion in Q1 2024, while agricultural imports amounted to N1.1 trillion.