The Centre for the Promotion of Private Enterprise, CPPE, has explained that export restrictions on primary products on the basis of domestic value addition would result in market distortion.
The Centre for the Promotion of Private Enterprise, CPPE, has explained that export restrictions on primary products on the basis of domestic value addition would result in market distortion. This comes as the economic think tank group urged the federal government to adopt a realistic and properly sequenced approach to policies on primary product exports and local value addition.
In a policy brief released on Sunday, CPPE Chief Executive Officer Dr Muda Yusuf warned that pushing value addition without addressing Nigeria’s structural challenges could undermine the country’s export competitiveness. “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,” Dr Yusuf said. He explained that Nigeria’s manufacturing sector still battles high production costs due to poor power supply, weak infrastructure, logistics challenges, and multiple taxation, making large-scale processing difficult in the short term. Dr. Yusuf noted that many industrialized nations first relied on primary exports to build capital, skills, and infrastructure before moving into value-added production. The CPPE boss also cautioned against export bans, levies, or restrictive policies on raw materials, saying such moves could reduce earnings for farmers and producers, encourage smuggling, and hit foreign exchange inflows. He urged the government to improve the business environment through measures like reliable energy, better transport infrastructure, easier access to finance, and simplified regulations, stressing that incentives rather than coercion would encourage local processing. “Primary product exports provide jobs, income, and foreign exchange. Curtailing them prematurely without fixing the fundamentals could be counterproductive,” he added. He concluded that Nigeria’s export strategy must balance immediate economic realities with long-term industrial goals, emphasizing that proper sequencing is key to sustainable growth and diversification.
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