Nigeria, Africa’s most populous country, is endowed with vast mineral and agricultural wealth, yet it exports much of it in raw form.
To reverse this, experts say the country must prioritise exporting value-added products to unlock job opportunities, expand industrial capacity, and strengthen its global trade position.
For Nigeria and the rest of Africa to partake in the next industrial revolution, they must end the practice of exporting raw minerals and other natural resources without processing them.
President Bola Tinubu stated this during the inaugural West African Economic Summit (WAES), where he called for a shift toward regional manufacturing and value-added production, urging leaders in this region to move away from extractive models that have historically failed to translate into economic development for their people.
“Our rare minerals power tomorrow’s green technologies, yet it is not enough to be resource-rich. We must become value-chain smart and invest in local processing and regional manufacturing,” the president said.
Data from the National Bureau of Statistics (NBS) showed that the total trade value of the raw materials sector stood at N2.8 billion in the first quarter (Q1) of 2025, of which imports were valued at N1,8 billion, while exports stood at N1.04 billion, higher than the value recorded in Q1 of 2024.
In 2024, Segun Tomori, spokesperson for Nigeria’s minister of solid minerals development, said that Nigeria will only grant new mining licences to companies that present a plan on how minerals would be processed locally, under new guidelines being developed.
Tomori noted that to spur investment, Nigeria will offer investors incentives, including tax waivers for importing mining equipment, while making it easier for them to secure electricity generation licences and allowing full repatriation of profits, and boost security.
Read also: AfDB urges Africa to move beyond raw exports in global energy transition
“In exchange, we have to review their plans for setting up a plant and how they would add value to the Nigerian economy,” he said.
Despite different plans and policies developed to promote local processing of raw materials, Nigeria still exports raw materials without adding value to them.
In May, the Nigerian Senate stated that Nigeria is taking a bold step towards industrial transformation with the passage of the Raw Materials Research and Development Council Amendment Bill, which mandates a minimum of 30 percent value addition before any raw material is exported.
This means that raw materials must undergo some level of processing within Nigeria, increasing their value before being shipped out of the country.
According to a report by the Guardian, data sourced from the Raw Materials Research and Development Council (RMRDC) showed that in the last decade, Nigeria improved its raw material value addition from 15.6 percent in 2013 to 25.2 percent in 2023.
The report showed that, however, this growth remains modest compared to its peers. South Africa grew from 63.2 to 75.6 percent; Egypt from 51.1 to 64.8 percent; and Brazil from 83.4 to 97.6 percent within the same period.
On average, Nigeria’s value addition over the decade was 20.43 percent, far below South Africa’s 69.4 percent, Egypt’s 57.79 percent, and Brazil’s 89.93 percent.
Obiora Madu, director general, African Centre for Supply Chain and President of the Association of Outsourcing Professionals (AOPN), said that Nigeria is losing a lot of money by exporting just raw materials, noting that the country is not deliberate in making significant progress in value addition.
“If we take them product by product, and look at what we are getting from the raw produce, then look at what they are getting after they have been processed, look at the jobs that they create, if we quantify all that, it’s a lot of money,” Madu said, noting that, each time we export raw produce, we export and lose jobs.
“The jobs that ought to be done here, you are sending them somewhere else to be done. So, the nations that import those raw resources gain jobs,” he said.
Madu added that there was an African Development Bank facility, called AfDB Export Stimulation Loan, which was supposed to change this phase of export in Nigeria by value addition, but a lot of fraudulent activities went into it.
“Typically, like many other things in Nigeria, people took advantage of it and saw it as a national cake. About 41 companies were set up, but as we speak today, maybe only one is still there,” he said.
