The Centre for the Promotion of Private Enterprise (CPPE) has cautioned that compulsory domestic processing of Nigeria’s primary commodities could backfire if local industries lack the capacity to handle raw materials efficiently.
In a policy brief released on Sunday, CPPE Chief Executive Officer, Muda Yusuf, said poorly designed value-addition policies risk distorting markets, reducing farmers’ incomes, and undermining recent gains in non-oil exports.
“The goal of moving Nigeria up the value chain is important and aligns with the country’s economic transformation agenda. But any policy requiring mandatory domestic processing must be guided by a simple principle: sufficient, efficient, and competitive processing capacity must exist before export restrictions are imposed”, Yusuf said.
The warning follows the Federal Government’s November 2025 plan to mandate a 30 per cent value addition on all raw materials prior to export. CPPE said enforcing such requirements prematurely could create excess local supply, depress farm-gate prices, and transfer value from primary producers to processors without improving productivity.
“Where foundational capacity is absent, compulsory value-addition mandates risk market distortions and impose hardship on farmers, aggregators, and rural communities. Value addition only delivers economic benefits when processed products are competitive in global markets”, the brief added.
CPPE also stressed that protectionist policies, rather than efficiency and productivity, cannot sustain a successful value-addition strategy. The think tank urged policymakers to align export restrictions with the real capacity of domestic industries to avoid undermining Nigeria’s growing non-oil export sector.
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