The Centre for the Promotion of Private Enterprise (CPPE) has cautioned the Nigerian government against introducing compulsory value-addition policies without first ensuring adequate domestic processing capacity.
CPPE raised the concern in a policy brief signed by its Chief Executive Officer, Muda Yusuf, dated February 8, 2026.
It said that while domestic value addition is important for Nigeria’s industrial growth, forcing local processing before the necessary infrastructure and competitiveness are in place could harm farmers, exporters, and the wider economy.
“Domestic value addition remains essential to Nigeria’s long-term industrial transformation. However, policy sequencing is decisive. Processing capacity, efficiency, and competitiveness must precede compulsion.
“Reversing this order risks suppressing primary-product prices, penalising rural producers, discouraging aggregators and weakening export performance,” the CPPE said.
The private sector advocacy group noted that Nigeria’s non-oil export sector has recorded strong growth in the past two years, largely due to foreign-exchange reforms that improved export incentives.
According to the organisation, poorly sequenced value-addition policies could reverse these gains.
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It stressed that domestic processing should only be made compulsory after Nigeria has sufficient and efficient processing plants, a reliable power supply, affordable financing, skilled labour, modern technology, and competitive production costs.
Without these conditions, the Centre warned that export restrictions on raw materials could distort markets and reduce incomes for primary producers.
CPPE also warned that restricting exports in the absence of strong local demand would likely lead to excess supply and falling prices for agricultural commodities.
This, it said, would hurt farmers and rural communities while indirectly subsidising processors through lower input costs.
The group also cautioned that suppressing farm-gate prices could weaken production incentives, threaten rural jobs, increase poverty, and ultimately undermine the supply of raw materials needed for future industrial growth.
According to CPPE, value addition driven mainly by export bans rather than efficiency could also make Nigerian processed goods uncompetitive globally, leading to higher costs, weak demand, lower foreign-exchange earnings, and increased smuggling.
The organisation further warned that sudden or poorly designed value-addition mandates could damage investor confidence and raise concerns about policy unpredictability in Nigeria’s non-oil export sector.
As an alternative, CPPE recommended a gradual and market-driven approach that focuses first on building processing capacity, reducing production costs, improving infrastructure, and protecting the incomes of primary producers.
It maintained that any move toward compulsory processing should be predictable, selective, and based on clear improvements in domestic capacity.
“Sustainable industrialisation is achieved by building competitive capacity that enables Nigerian processed products to succeed locally and globally on the strength of efficiency, quality, and cost competitiveness.
“A balanced, inclusive, and capacity-driven strategy will deliver credible export growth, resilient rural livelihoods and durable industrial development for Nigeria,” the CPPE added.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
