CPPE cautions against RMRDC bill’s 30% mandate, citing economic risks

Onome Amuge

Muda Yusuf, CEO, CPPE

The Centre for the Promotion of Private Enterprise (CPPE) has issued a warning against a proposed  bill by the Raw Materials Research and Development Council (RMRDC) Bill currently before the National Assembly, which seeks to ban the export of primary products without at least 30 per cent local value addition and prohibit the import of raw materials deemed sufficiently available domestically.

 The Nigerian business advocacy group argues that the bill’s provisions, which are simplistic and fraught with potential negative consequences, could inflict damage on the country’s manufacturing and export sectors.

Muda Yusuf, chief executive officer of the CPPE, cautioned that the legislation risks jeopardising thousands of jobs linked to Nigeria’s rising non-oil export sector, including commodities such as cocoa, cashew, and sesame. He also raised concerns that the bill could exacerbate bureaucratic corruption due to the introduction of new layers of regulatory approvals.

The CPPE, in a statement,  criticised the bill’s ambiguous definitions and the absence of clear metrics for implementation. The organisation warned that the proposed regulations could undermine both exporters and processors, urging the National Assembly to halt further deliberations on the bill. Instead, the CPPE suggested that the RMRDC should refocus its efforts on its primary mandate of research and development.

While acknowledging the principle of encouraging value addition within Nigeria, the CPPE stressed that the current bill risks creating serious unintended consequences. 

Yusuf argued for a win-win proposition that balances the interests of both exporters and processors, contending that the current proposal falls short of this.

The business lobby raised specific concerns about the lack of clarity surrounding the definition of 30 per cent local value addition and the process for determining whether raw materials are “sufficiently available locally. The CPPE questioned the feasibility of these provisions and their potential impact on various industries.

Highlighting the potential job losses, the CPPE pointed out that even Nigeria’s dominant export, crude oil, was not subject to domestic refining until relatively recently. 

The organisation argued that the struggles faced by many agro-processors are not primarily due to raw material scarcity but rather stem from structural issues such as high energy costs, poor infrastructure, and unfavourable policy environments.

Furthermore, the CPPE criticised what it perceives as an overreach by the RMRDC. The organisation asserted that matters concerning import and export regulation fall squarely within the remit of fiscal policy, which is the responsibility of the Ministry of Finance, in collaboration with other relevant ministries, including National Planning and Industry, Trade and Investment, as well as the Nigeria Export Promotion Council (NEPC).

Yusuf warned that the proposed legislation could create new avenues for bureaucratic corruption, forcing businesses to navigate an additional layer of governmental approvals.

Concluding its assessment, the CPPE deemed the bill to have a very weak value proposition. The organisation reiterated its call for the National Assembly to discontinue deliberations and urged the RMRDC to concentrate on its core function of researching and providing cost-effective raw material options for Nigerian manufacturers.

“The council’s involvement in trade policy matters is an aberration,” Yusuf stated, adding that trade policy must remain flexible and responsive, not locked into rigid legislation.