The Senate has taken a significant step toward reshaping Nigeria’s economic landscape by advancing a bill that mandates local processing of at least 30 per cent of raw materials before exportation.
The proposed legislation, which seeks to amend the Raw Materials Research and Development Council Act, 2022, is designed to prioritize domestic processing and production protection.
The bill, spearheaded by Senator Peter Nwebonyi of APC Ebonyi North, passed its second reading during Tuesday’s plenary.
Leading the debate, Senator Nwebonyi underscored the transformative potential of the bill, stating: “Promoting local processing to a minimum of 30 percent or more will add value to our economy, particularly to our Naira. It will also encourage innovation within our local industries, leading to a significant increase in domestic production.”
He emphasized that the bill’s enactment would bolster local manufacturing, create jobs, reduce dependency on imports, and curb the high demand for foreign exchange.
The legislation also aims to shield Nigerian manufacturers from foreign competition by regulating the export of raw materials that could be processed locally.
This, according to Nwebonyi, would provide a thriving environment for domestic industries.
Deputy Senate President Senator Jibrin Barau lent his voice in support, applauding the bill’s potential to re-energize the economy.
He lamented the continuous exportation of raw materials, which, he said, fuels the development of foreign economies at Nigeria’s expense.
“We have the capacity, human capital, and technical resources to act on these raw materials and to process these raw materials. And by not doing so, we are undermining our economy while allowing for the promotion of other economies,” Barau said.
He further asserted: “Once this bill is passed, it will now be mandatory that these raw materials be processed here, at least 30 per cent. This will energise our economy by providing jobs and promoting our real sector. Several industries will emerge because it will now be mandatory that you don’t engage in this lazy attitude of taking raw materials outside the shores of this country. This raw material must be processed here.”
However, Senator Kamorudeen Oyewumi, PDP Osun West, raised concerns over the bill’s practicality. He pointed out challenges in sectors where local processing capacity is lacking.
“There is a need for amendments due to the nature of some products. We assume that all these products should not be exported raw, but what about when there are no companies to process them locally?” he queried.
Oyewumi warned that rigid enforcement of the bill might harm local farmers who depend on export markets for their raw materials. He suggested a more flexible approach, noting: “Farmers may incur losses if raw materials cannot be processed locally.”
The Senate President, Senator Godswill Akpabio, commended the progress made and referred the bill to the Committee on Science and Technology for further review.
The committee is expected to report back within four weeks, marking the next phase of deliberations on this potentially game-changing legislation.