The Centre for the Promotion of Private Enterprise (CPPE) has cautioned that restricting the export of primary products in the name of promoting domestic value addition could lead to market distortions and weaken Nigeria’s export performance.
The economic think tank made the warning in a policy brief released on Sunday, urging the federal government to adopt a more realistic and carefully sequenced approach to policies on primary product exports and local value addition.
CPPE’s Chief Executive Officer, Dr Muda Yusuf, said that while value addition remains a critical objective, pursuing it without addressing Nigeria’s deep-seated structural challenges could undermine the country’s competitiveness in global markets.
“Value addition is important, but it must be pursued with realism and proper sequencing. Exporting primary products should not be discouraged in an environment where the cost of processing is uncompetitive,” Yusuf said.
He noted that Nigeria’s manufacturing sector continues to struggle with high production costs driven by unreliable power supply, inadequate infrastructure, logistics bottlenecks, and multiple taxation. These constraints, he said, make large-scale processing of raw materials difficult in the short to medium term.
Yusuf pointed out that many industrialised economies initially depended on primary product exports to build capital, skills, and infrastructure before transitioning into value-added manufacturing.
He also warned against the use of export bans, levies, or restrictive measures on raw materials, arguing that such policies could depress incomes for farmers and producers, encourage smuggling, and reduce foreign exchange inflows.
According to him, a more effective strategy would focus on improving the overall business environment through reliable energy supply, better transport infrastructure, improved access to finance, and simplified regulatory processes.
“Incentives, rather than coercive measures, are more likely to stimulate local processing,” he said, adding that primary product exports remain a vital source of jobs, income, and foreign exchange for the economy.
Yusuf concluded that Nigeria’s export strategy must strike a balance between immediate economic realities and long-term industrialisation goals, stressing that proper sequencing of policies is essential for sustainable growth and economic diversification.