Economists Advocate for Local Value Addition to Curb Soaring Import Costs
In response to the economic pressures emanating from the ongoing Middle East crisis, Nigerian economists are issuing a unified call for the federal government to prioritize building domestic capacity for adding value to raw materials. This strategic shift is seen as critical for reducing the nation’s reliance on expensive imported manufactured goods and inputs.
The consensus among experts is that Nigeria possesses abundant raw materials but fails to capitalize on them due to chronic weaknesses in processing capacity, policy enforcement, infrastructure, and industrialization. Data from the National Bureau of Statistics underscores the scale of the challenge, revealing that Nigeria spent approximately N3.53 trillion on raw material imports in the first half of 2025—a 19.7% increase from the same period in 2024. Over 70% of manufacturing inputs are still sourced from abroad.
Dr. Paul Alaje, Chief Economist at SPM Professionals, emphasized that Nigeria’s industrial sector remains perilously dependent on imported raw materials. He argued that imports should be strictly limited to commodities not available domestically. Dr. Alaje urged the government to systematically identify, map, and invest in states with viable agricultural and mineral resources to boost productivity.
Echoing this sentiment, Dr. Muda Yusuf, Chief Executive of the Center for the Promotion of Private Enterprise (CPPE), highlighted the multifaceted benefits of local value addition, including job creation, relief on foreign exchange pressure, and an improved balance of payments position. However, Dr. Yusuf issued a critical caveat, noting that the current exorbitant cost of domestic production often renders finished goods uncompetitive, both locally and internationally.
The roots of this industrial struggle are deep-seated. Financial economist Zakari Mohammed pointed to decades of policy inconsistency and infrastructural decay, which have stifled a manufacturing sector that should be a primary contributor to GDP. This legacy of instability, reminiscent of shifts in political strategies, continues to hinder progress. The financial toll is staggering: by exporting raw materials only to re-import them in processed forms, Nigeria forfeits trillions of naira in potential foreign exchange earnings, job opportunities, and economic growth, while exacerbating its import bill and inflationary pressures.
Nigeria’s paradox is glaring. The nation sits on vast deposits of iron ore, copper, zinc, lithium, and tin, yet it remains a major importer of steel, aluminum, and other industrial metals. Addressing this disconnect through concerted local value addition is now framed as an economic imperative. The recent focus on fiscal policy, such as the discussions surrounding Sanwo-Olu: tax reforms, highlights the broader context of economic restructuring needed to support such industrial transformation.
