The Centre for the Promotion of Private Enterprise (CPPE), has called for a sequenced domestic value addition policy, for it to achieve the much-desired result, and further the country’s dream at  industrialisation.

 

 

The Chief Executive Officer of the  Centre, Dr. Muda Yusuf, who stated this recently,  noted  that, while domestic value addition would help in the areas of employment generation, export diversification, and improved foreign-exchange earnings; government, he added,  must, however, consider processing capacity, efficiency and competitiveness, before making such policy compulsory products before export.

 

 

He  described the federal government’s efforts at moving Nigeria up the value chain in the production and export of primary commodities as both legitimate and consistent with the country’s broader economic transformation agenda.

 

 

The CPPE boss however, argued that  any policy framework that mandates compulsory domestic processing prior to export must be guided by a fundamental economic principle, which requires  adequate, efficient, and competitive domestic processing capacity, before export restrictions on primary products are imposed.

 

 

He therefore  called for policy sequencing that would ensure processing capacity, efficiency, and competitiveness, before such policy is made compulsory.

 

 

Yusuf  warned that reversing this order, could  suppress primary-product prices, penalise rural producers, discourage aggregators and weak export performance.

 

 

“ Where such foundational capacity is absent, compulsory value-addition policies risk generating distortions across commodity markets and imposing significant hardship on actors within the primary production value chain.

 

 

“This concern is particularly critical in the context of the strong momentum recorded by Nigeria’s non-oil export sector over the past two years, driven largely by foreign-exchange reforms that strengthened export incentives and competitiveness. Premature or poorly sequenced value-addition mandates could undermine these hard-won gains,” he added.

 

 

The CPPE boss called for sufficient installed and operational processing capability, competitive production costs relative to global benchmarks and reliable infrastructure, especially power, transportation, and other logistics, access to finance at low interest rates,  among other requirements before value addition could be made compulsory.

 

 

He added that if the enabling conditions are weak or absent, forcing value addition through export prohibitions or restrictions, could become  economically counterproductive and potentially damaging to primary product producers, processors, and the wider economy.