Senate passes bill mandating 30% local processing of raw materials before export

The senate has approved a bill mandating that all raw materials exported from the country must undergo a minimum of 30 percent local processing before they are shipped abroad.

The decision followed the adoption of the report by the senate committee on science and technology on the amendment of the Raw Materials Research and Development Council Act, 2022.

The bill, sponsored by Onyekachi Nwebonyi, senator representing Ebonyi north, seeks to promote value addition, strengthen the 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 be subjected to a 15 percent levy on the export value of the raw materials and may face 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 will be responsible for issuing detailed guidelines defining what constitutes 30 percent processing, including benchmarks for quality, safety, and environmental sustainability.

Raw materials exported without meeting the processing threshold will be deemed as “smuggled goods” and penalised under existing customs and trade regulations.

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

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

During plenary on Wednesday, Godswill Akpabio, the senate president, said the amendment marks a major step toward industrialisation.

“It will increase capacity to reduce reliance on totally imported raw materials,” he said.

“It will 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.

“This will support the adoption of advanced processing technologies in local industries to improve efficiency and product quality.”

Akpabio said the law would reduce imports of materials already available locally, protect local industries from unfair competition, and encourage investment in domestic processing capacity.

The senate president noted that the law would also support the adoption of modern technologies to improve efficiency and quality in local manufacturing.

He added that the move would attract investors seeking to process raw materials within Nigeria, further boosting the industrial sector.