Nigeria’s Imperative for Raw Material Independence: A Path to Industrial Powerhouse Status
Nigeria’s aspiration to become an industrial powerhouse hinges critically on reducing its reliance on imported raw materials. The Raw Materials Research and Development Council (RMRDC) has emphasized the urgency of this shift, advocating for a 60% reduction in foreign raw material imports within the next five years. This call to action stems from the alarmingly high import bill for raw materials, which reached a staggering N4.53 trillion in just the first nine months of 2024. This dependence on foreign inputs exposes a fundamental weakness in the Nigerian economy: the export of raw materials in their crude form, followed by their re-importation in refined form, leading to a significant loss of jobs and value creation. The RMRDC argues that the solution lies in prioritizing local resource utilization and fostering a robust domestic raw materials processing industry.
The manufacturing sector’s contribution to Nigeria’s GDP remains disappointingly low, highlighting the need for a transformative approach. While the sector contributed 9.62% to GDP in the first quarter of 2025, a slight decline from the previous year, Nigeria possesses immense potential for rapid industrialization. The country boasts over 120 commercially viable solid minerals, abundant agricultural resources, and a large, youthful population. However, realizing this potential requires strategic coordination, decisive implementation, and a commitment to leveraging technology-driven solutions. This includes targeted government support, incentivizing value addition, and fostering research and development initiatives tailored to the specific needs of the manufacturing sector.
The RMRDC has taken proactive steps to address this challenge, establishing a Research and Demonstration Plant Complex in Abuja. This facility showcases over 50 locally developed pilot plants, demonstrating Nigeria’s capacity to transform raw materials into valuable finished goods. Each piece of locally engineered or reverse-engineered processing equipment serves as a testament to the country’s potential for self-sufficiency and economic growth. The RMRDC Amendment Bill 2025, recently passed by the Senate, further strengthens this commitment by mandating a minimum of 30% local value addition for all exported raw materials. This legislative milestone represents a crucial shift towards nurturing jobs and value creation within Nigeria, rather than exporting them abroad.
Furthermore, the Federal Government has introduced new tax incentives to encourage the use of local inputs in manufacturing. Manufacturers who invest in research, development, and the utilization of local raw materials will benefit from significantly lower tax rates. This policy aims to create a competitive advantage for businesses that prioritize local sourcing, further stimulating the domestic raw materials industry. The government is also actively promoting the commercialization of research outcomes and the adoption of indigenous technology. An inter-ministerial committee, chaired by the Vice President, has been established to drive funding and implementation in this crucial area.
Executive Order 5 provides additional support for locally manufactured products by restricting the importation of goods that are already being produced commercially within Nigeria. This protectionist policy aims to create a level playing field for domestic manufacturers and encourage the growth of local industries. Solar panels serve as a prime example of goods benefiting from this policy. The government is also actively encouraging foreign manufacturers, including those from China, to relocate their production lines to Nigeria, thereby creating jobs and boosting local content.
The Nigeria Manufacturing & Equipment and Nigerian Raw Materials Expo, held in 2025, served as a platform to showcase the country’s commitment to promoting locally made products and fostering the development of a robust manufacturing sector. The expo’s focus on embracing cutting-edge technology, promoting smart factory protocols, and adopting sustainable practices underscores the importance of innovation and efficiency in driving industrial growth. The Manufacturers Association of Nigeria has also emphasized the significance of aligning with the government’s “Nigeria First” policy and promoting the patronage of locally manufactured goods. This collaborative approach between government, industry, and research institutions is essential for achieving Nigeria’s ambitious goal of becoming an industrial powerhouse.
