Why Akpabio’s Push for 30% Value Addition Before Raw Material Exports Makes Sense

Recently, Akinwumi Adesina, President of the African Development Bank (AfDB), issued a scathing criticism of African countries for exporting raw materials instead of exporting value-added products.

In a post on X, formerly known as Twitter, Adesina described the export of raw materials as a gateway to poverty. The export of value-added products, on the other hand, is the highway to wealth.

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It seems his advocacy for value-added exports over raw material exports found the right audience in Senate President Godswill Akpabio.

Speaking on Wednesday when he received members of the Raw Materials Research and Development Council (RMRDC), Akpabio said the National Assembly is committed to amending the RMRDC Act to enact a proposal mandating a minimum of 30 per cent local value addition before any raw material is exported.

Onyekachi Nwebonyi, Deputy Chief Whip of the Senate, is sponsoring the amendment bill.

Akpabio described the proposed amendment to the RMRDC Act as a “moral compass” for other African countries.

“If any of the values were to be added in Nigeria before exporting them, we would have had at least a factory for those chains that would have also created jobs for our people outside what the farmers are doing,” he said.

The Senate president is right.

Nigeria is blessed with various kinds of raw materials with the potential to make it a global economic heavyweight, but a disturbing prioritisation of exporting raw materials over value-added products has stunted the growth of Nigeria’s global trade. Creating value from raw materials, as Akpabio stated, provides plenty of job opportunities for young people who are devastated by an unemployment crisis.

The Senate president also slammed the economic lunacy of exporting raw materials like cocoa and importing the value-added products at higher costs. This challenge exists in the oil sector as well.

“It is quite unfortunate that we produce cocoa in Nigeria but end up importing the same cocoa products from outside the country at a higher cost and without any input,” the politician said.

In contrast, Côte d’Ivoire, which processes around 40 per cent of its cocoa, earned $5 billion from cocoa exports in 2022, compared to Nigeria’s $800 million, according to the Stockholm Environment Institute (SEI).

According to Akpabio, the solid minerals sector suffers the most from a lack of value addition.

“The most pathetic is the solid mineral sector because we are not adding any value before we sell it,” the Senate president said.

“The result is you sell it at a very cheap rate and if you sum it up, you will see that development in Africa in 2025 is still in a primitive state when it comes to recognising and utilising the potential available within its domain.

“Poverty is really biting harder because of nothing but ignorance.”

AfDB president, Akinwunmi Adesina recently called on African countries to place more premium on value-added exports than raw material exports. Senate President Akpabio has echoed that charge

His sentiments echo those of the AfDB president, who has argued that the continued export of raw materials by African countries has led to crippling poverty on the continent.

By investing in domestic processing capacity—whether in oil refining, agro-processing, or light manufacturing—Nigeria can significantly boost export earnings, improve its trade balance, and protect itself from commodity price shocks.

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While the requirements of a minimum of 30 per cent value addition before the export of raw materials may seem insufficient, it is a step in the right direction. Strict enforcement of this policy may revitalise Nigeria’s economy for the better.

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