Nigeria’s Missed Opportunities: Unleashing the Power of Value Addition

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Nigeria is renowned for its abundant mineral and agricultural raw materials that are suitable for export. However, these resources are often exported in their raw state, lacking significant value addition before being exported. This missed opportunity not only results in the loss of potential revenue, but also deprives the nation of essential employment opportunities. Consequently, there have been calls for government intervention to address the high-cost environment that inhibits processing and to invest in processing facilities.

An example of this missed opportunity is Nigeria’s cocoa production. Despite being the world’s sixth-largest cocoa producer, only 30 per cent of the country’s cocoa beans undergo processing into cocoa derivatives, while the remaining 70 per cent is exported without being processed. This lack of value addition means that Nigeria is unable to tap into the multi-billion dollar market for finished goods from cocoa.

Similar to the cocoa industry, Nigeria’s sesame seed production also experiences this challenge of missed opportunities. Despite being Africa’s second-largest producer of sesame seeds, about 95 per cent of the country’s output is exported without processing. If Nigeria had the facilities to process even half of the exported sesame seeds, the country could reap significant revenue and create numerous job opportunities across the product’s value chain.

Furthermore, Nigeria’s solid minerals sector presents immense untapped potential, with over 44 strategic solid minerals in about 450 locations across the country. The Minister of Solid Minerals Development estimates that the country’s mining sector’s mineral deposits are worth a staggering $700 billion. Exporting raw solid minerals without adding value continues to be a challenge, resulting in lost revenue and job opportunities.

The high-cost environment in Nigeria, combined with the lack of access to capital for setting up processing facilities, process technology, and spare parts, has deterred operators and investors from engaging in local processing. The capital-intensive nature of establishing and running processing plants, poor infrastructure, and the challenge of marketability compared to imported products have further compounded this issue.

To address this challenge, government intervention is crucial to create a conducive environment for processing and manufacturing activities. Prioritising value addition on exports will not only reduce Nigeria’s over-dependence on importation, but also enhance its competitiveness, especially in the manufacturing sector. This initiative will contribute to the growth of Small and Medium-sized Enterprises (SMEs) and empower local entrepreneurs to participate actively in the manufacturing value chain.

In conclusion, Nigeria holds immense untapped potential in value addition across various sectors, including cocoa, sesame seeds, and solid minerals. By investing in processing facilities and promoting value addition practices, the country can unlock significant revenue streams, create numerous job opportunities, and enhance its competitiveness in the global market.

Citations:
– The Nation Newspaper
– United Nations Food and Agriculture Organization (FAO)
– Nigerian Export Promotion Council (NEPC)
– Multinational professional services company PricewaterhouseCoopers (PwC)
– Minister of Industry, Trade and Investment, Dr. Doris Uzoka-Anite

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