Chief Executive Officer (CEO) of Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has expressed displeasure over the Raw Materials Research and Development Council (RMRDC) Bill currently before the National Assembly, saying it has the prospect of creating significant adverse and unintended consequences for local exporters and manufacturers.
  
The bill proposes that no primary products’ exports should take place unless there is a minimum of 30 per cent local value addition, and that manufacturers will not be allowed to import raw materials that are available in sufficient quantity in the country.
  
Explaining, he said, on the surface, the idea of promoting local value addition looks good for the economy and could potentially enhance the chances of better earnings from exports. He, however, noted that the policy has to ensure a balance between the interests of exporters of primary products and the processors. 
  
He added that it is also imperative to undertake a robust study on domestic raw materials availability before legislating a ban on raw materials for manufacturers.   
  
“What is needed is a win-win proposition, not a zero-sum game. The current proposal in the bill will penalise exporters in the country, most of whom export primary products. Thousands of jobs in the primary products export supply chain would be put at risk.  The major non-oil exports are cocoa beans and cocoa butter, cashew nuts, Gum Arabic, Ginger, sesame seeds, and shea butter.

Even crude oil export is still a major component of Nigeria’s export. Until recently, domestic refining capacity was nil,” Yusuf said.
   
Noting that the proposition raises several questions, the CEO wondered what metrics would be used to determine the minimum 30 per cent value addition, who determines and approves for export to proceed, and what study has been done to determine the local processing capacity for each category of primary products currently being exported.
  
“Also, what metrics would be used to determine raw materials that manufacturers would be allowed to import into the country? What is the effective timeframe for implementation, and is it within the mandate of the RMRDC to be promoting the ban of exports or imports?” he queried.
  
Lamenting that this bill raises more questions than answers, Yusuf said it is a very simplistic proposition which has not considered the critical challenges of manufacturing, processing and value addition in the Nigerian economy. 
 
“This contextual understanding is very critical to enrich the conversations around the raw materials bill. Most agro processors have collapsed not so much because of the raw materials, but the challenges of productivity and competitiveness. Production costs are prohibitive. The cost of energy, funds, logistics, bureaucratic bottlenecks, FX, multiple taxation and so on are much bigger issues that need to be addressed to promote value addition. We should be causative in our approach to solving problems and focus less on the symptoms,” he said.
   
Pointing out that import and export regulations are not often legislated, he said they are trade policy issues which are calibrated from time to time by the fiscal policy authorities in the light of prevailing economic conditions.  
  
“It is not a matter for the national assembly to legislate upon. Trade policies are meant to be flexible, which is why they are not often a subject of legislation.”
   
He urged the national assembly to halt deliberations on the bill and instead encourage the RMRDC to focus on its core mandate of raw materials research to offer more cost-effective raw materials options for manufacturers. “The council’s involvement in trade policy matters is an aberration. Besides, the bill has a very weak value proposition, and the RMRDC should withdraw this bill,” he said.