By Stella Azi and Adaora Adibe
The Director-General and Chief Executive Officer of the Raw Materials Research and Development Council (RMRDC), Professor Nnanyelugo M. Ike-Muonso, has disclosed that as the Nigerian manufacturing sector grapples with an unprecedented macroeconomic squeeze, the cement industry has emerged as a beacon of structural resilience, saving the country an estimated $2.5 billion annually through the successful implementation of import substitution policies in the sector. Prof. Ike-Muonso made this known during a one-day Policy Dialogue Session on ‘Improving Local Raw Material Utilization: An Update on the Proposed Bill on 30% Value Addition on Local Raw Materials’, organized by the Manufacturers Association of Nigeria (MAN), held at MAN House, Ikeja, Lagos.
Presenting his paper titled, ‘Local Raw Materials Sourcing Strategies, and Forex and Commodity Price Risk Management in Nigeria’, Prof. Ike-Muonso expressed concern about how manufacturers survive in a volatile economy with very high risk of foreign exchange and commodity price management.
The DG stated that the nation’s current industrial challenge could be traced back to mid-2023, when the Federal Government moved to unify the country’s pegged and freely floating foreign exchange rates. ‘The resulting automatic adjustment saw the naira plunge from roughly ₦750 to over ₦1,400 per dollar, delivering a catastrophic shock to a manufacturing sector structurally hooked on imported inputs”, he noted.
He observed that with the removal of the petrol subsidy, landed costs for raw materials skyrocketed, fueling severe inflation and destabilizing domestic production ecosystems. “By 2024, data revealed that a staggering 70% of raw materials across Nigerian factories were still imported”, he informed.
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Ike-Muonso noted that to achieve any meaningful economic growth, the nation needs to look inward, leveraging Nigeria’s abundant raw materials resources. According to him, the transition of Nigerian cement industry from 100% import dependence in 2000 to 95% local sourcing of limestone and gypsum by 2018 in present day, stands as the global benchmark for backward integration of which the RMRDC has contributed tremendously to the remarkable industrial success story of the sector, adding that today, the sector saves Nigeria from an estimated 2.5 billion dollar it could have lost.
He explained that before Nigeria attained self-sufficiency in cement production, the country spent substantial amounts of foreign exchange annually on importing cement and clinker. However, deliberate policies promoting backward integration and local production have transformed Nigeria into one of Africa’s leading cement-producing nations.
The DG emphasized that the success story offers valuable lessons for other manufacturing sectors to navigate the current economic challenges, and that increasing local sourcing of raw materials remains a viable strategy for manufacturers to manage foreign exchange risks, improve competitiveness, and ensure long-term sustainability.
He explained that the Council has championed a legislative amendment requiring a minimum 30% value addition in raw materials before export from Nigeria, based on the principle that value must be added to local content before export to protect domestic industries and create jobs for Nigerian youths.
“We cannot industrialize if we keep leaving foreigners to take our resources without value addition; We are deprived of the raw materials for our local industry, and our people are denied employment; We cannot industrialize until there is change”, he urged.
He stressed that proposed RMRDC 30% raw materials value addition bill is aimed at deepening industrialization, promoting innovation, and ensuring that Nigeria derives greater economic benefits from its vast raw material resources.
“The future of this country lies in the signing into law the 30% Value Addition bill mandating that no raw materials resourced (whether agriculture or minerals) is exported out of the country without at least 30% value added”.
Prof. Ike-Muonso also stated that to support this industrial evolution, RMRDC has deployed its second-generation, robust raw materials database, the Nigerian Information Statistical System for Raw Materials and Products (NISSRAMP), to provide real-time information on local input availability. He added that the platform is designed to provide comprehensive data and information on Nigeria’s vast raw materials and products, enhance supply chain efficiency, promote value addition and support evidence-based policymaking in the raw materials development sector.
Industry stakeholders at the dialogue session commended the RMRDC for its immense contribution to the progress recorded in the cement sector and expressed optimism that similar outcomes could be achieved in other sectors through stronger collaboration between government, manufacturers, and research institutions.
They noted that the critical role of backward integration and import substitution in building a more resilient economy, conserving foreign exchange, and accelerating Nigeria’s journey toward industrial self-reliance cannot be over emphasized.
