Senate mandates 30% local processing for raw material exports

 Nigeria’s Senate has passed a bill mandating that all raw materials must undergo a minimum of 30 percent local processing before being exported from the country.

This decision, following the adoption of a report by the Senate Committee on Science and Technology, amends the Raw Materials Research and Development Council (RMRDC) Act, 2022.

The bill, sponsored by Senator Onyekachi Nwebonyi, representing Ebonyi North, is designed to promote value addition, strengthen Nigeria’s local manufacturing sector, reduce reliance on imports, and stimulate sustainable economic growth.

Under the new provisions, any exporter who fails to meet the 30 percent processing requirement will face a 15 percent levy on the export value of the raw materials.

Additionally, they risk the suspension or revocation of their raw material value addition certificate.

The level of processing will be assessed based on the nature of the material, the technology applied, and the standards required by the target export market.

The Raw Materials Research and Development Council (RMRDC) will be responsible for issuing detailed guidelines to define what constitutes 30 percent processing, including benchmarks for quality, safety, and environmental sustainability.

Raw materials exported without meeting this processing threshold will be considered “smuggled goods” and penalized under existing Customs and trade regulations.

The bill also aims to significantly encourage local industries by reducing the importation of materials that can be sourced or processed domestically.

In his remarks, Senate President Godswill Akpabio lauded the amendment as a major step towards Nigeria’s industrialization.

“This bill is expected to create job opportunities, boost Nigeria’s trade competitiveness globally, and promote responsible management of the country’s natural resources,” Akpabio stated.

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He emphasized that the new law will “increase capacity to reduce reliance on totally imported raw materials, promote sustainable resource management, environmental protection through the adoption of best practices in the utilisation of locally sourced raw materials, and in addition, it will reduce carbon footprints.”

Akpabio also highlighted that it will support the adoption of advanced processing technologies in local industries to improve efficiency and product quality.

The Senate President further noted that the law would reduce imports of materials already available locally, protect local industries from unfair competition, and encourage investment in domestic processing capacity.

He concluded that it would also attract investors seeking to process raw materials within Nigeria, thereby further boosting the industrial sector.