By Stella Azi & Adaora Adibe
The Director-General of the Raw Materials Research and Development Council (RMRDC), Professor Nnanyelugo Ike-Muonso, has reiterated the need for Nigeria and other African countries to embrace a minimum of 30% value addition to raw materials before export, describing the policy as a critical pathway to industrialisation, job creation, and economic transformation.
Professor Ike-Muonso made the call while presenting a lead paper titled “Local Sourcing and Managing Foreign Exchange Fluctuations and Commodity Price Risks: Opportunities and challenges, Trade policies and incentives for Manufacturers, Backwards Integration and update on the Proposed Bill of 30% Value Addition” at a one-day Policy Dialogue on Improving Local Sourcing and Raw Materials Utilisation organised by the Manufacturers Association of Nigeria (MAN) in Lagos on Wednesday 17th June 2026.
Addressing manufacturers, policymakers, the Nigeria Customs Service and industry stakeholders, Prof. Ike-Muonso examined challenges confronting Nigeria’s manufacturing sector, particularly the impact of exchange rate volatility, rising import dependence, high production costs, and inadequate local processing capacity.
He noted that the 2023 exchange rate reforms, which unified Nigeria’s multiple foreign exchange windows, triggered a sharp depreciation of the naira and significantly increased the cost of imported raw materials and industrial inputs.
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According to him, the development exposed the vulnerability of Nigeria’s manufacturing sector, which remains heavily dependent on imported intermediate goods and production materials.
“The reality is that manufacturers can no longer rely on imports if they are to remain competitive and sustainable. The future lies in looking inward and leveraging the abundant resources available within the country,” he said.
Professor Ike-Muonso observed that about 70 per cent of raw materials used by Nigerian manufacturers are still imported, a situation he described as unsustainable for a country seeking industrial growth and economic resilience.
He stressed that local sourcing and backward integration have become survival strategies for industries seeking to mitigate foreign exchange risks and commodity price volatility.
The RMRDC Director-General argued that industrialisation cannot be achieved while Nigeria continues to export raw materials in their primary state without significant value addition.
He explained that the Council’s proposed 30% value addition policy seeks to ensure that no raw material leaves the country without undergoing a minimum level of processing capable of creating jobs, conserving foreign exchange, and stimulating local industrial development.
“We cannot industrialise if foreigners continue to take away our resources without adding value. Our industries are deprived of critical raw materials, while our people are denied employment opportunities. This must change,” he stated.
Highlighting the economic benefits of the policy, Ike-Muonso disclosed that recent data indicate that every 10% increase in local sourcing could result in approximately 4% growth in manufacturing employment.
He added that achieving the proposed 30% value addition target could boost employment generation in the manufacturing sector by about 12 per cent while significantly reducing pressure on the country’s foreign exchange reserves.
Ike-Muonso cited the cement industry as a successful example of backward integration and local sourcing, noting that the sector had moved from almost complete dependence on imported inputs in the early 2000s to about 95 per cent local sourcing of limestone and gypsum.
According to him, the transition has saved Nigeria billions of dollars in import costs and demonstrated the viability of local content policies.
He also pointed to successes recorded in the brewery industry, where local sourcing of sorghum has substantially reduced dependence on imported malted barley, as well as increasing utilisation of locally sourced kaolin and calcium carbonate in the paint and plastics industries.
Despite these gains, Ike-Muonso identified several obstacles to local sourcing and industrial development, including inadequate energy infrastructure, high financing costs, limited processing capacity, insecurity, logistics challenges, and insufficient technological capability.
He revealed that manufacturers spent over ₦1.34 trillion on alternative power sources in 2025, a development that continues to undermine competitiveness and profitability.
The Director-General further lamented the low value captured from many of Nigeria’s raw materials, citing shea nut and cocoa as examples where the country retains only a small fraction of the value generated from global markets.
He advocated deliberate investments in processing technologies, reverse engineering, raw material characterisation, and capacity building to strengthen domestic value chains and increase industrial competitiveness.
On regional trade, Ike-Muonso called for the effective implementation of the African Continental Free Trade Area (AfCFTA), stressing that African countries must first build productive capacities and strengthen value addition before fully exploiting continental market opportunities.
He also highlighted RMRDC’s efforts in developing a comprehensive national raw materials database to provide investors, manufacturers, and policymakers with reliable information for industrial planning and resource utilisation.
“The future of Nigeria’s industrialisation lies in value addition. If we process our raw materials locally, we create jobs, conserve foreign exchange, strengthen supply chains, and build a more resilient economy,” he said.
Stakeholders at the dialogue event commended the Council, especially Prof. Ike-Muonso for the advocacy, for local sourcing and value addition, describing the initiative as a timely intervention capable of accelerating industrial growth and reducing the country’s dependence on imported raw materials.
