Value Addition as Pillar of Nigeria’s Resource Based Industrialisation

The necessity of value addition to raw materials and commodity products before exporting through domestic processing is gaining attention as Nigeria’s pathway to industrialisation and economic prosperity, writes Dike Onwuamaeze

The Director General of Raw Material Research and Development Council (RMRDC), Professor Nnanyelugo Ike-Muonso, was on his evangelistic garb when he delivered the “Bullion Lecture 2026.” Ike-Muonso’s topic was, “From Resources to Prosperity: How Raw Materials Development, Value Addition and Innovation Can Catalyse Nigeria’s Industrial Renaissance.” His message, which was direct and simple, is that Nigeria must embrace resource based industrialisation (RBI) and should transition from a ‘low value-added trap’ to adding value to its raw materials through processing for industrial manufacturing and export.

He gave the four steps in value addition ladder as raw export (low value), semi-processing, finished goods and lastly branding and innovation, which guarantees the highest value.

According to him, this is a sure ticket for prosperity that every Nigerian has been yearning for. “Prosperity is the endgame and everything we fight for is for prosperity,” he said.  

He said that Nigeria is losing much revenue by exporting commodities in their raw states. For examples, export of cashew nuts in their raw form would attract $1,250 per tonne whereas the export value of semi-processed nuts is $7,800 per tonne.

Similarly, export of raw cashew nuts fetches $7,200 per tonne but the value rises to $14,500 if it is processed into butter, liquor, powder or chocolate. In the same manner, lithium, in its raw form attracts $3,000 per tonne against $30,000 a tonne of processed lithium concentrates and salts would command in the international market. Likewise, raw nickel sells at $17,200 per tonne against the value of $85,000 per tonne when it is processed to concentrates or refined for electric vehicles’ batteries.

Ike-Muonso said that while Nigeria is exporting its cashew nuts in their raw form, Vietnam is achieving 100 per cent processing cocoa beans. 

In the same manner, The Netherlands, which is not a producer of cocoa but a world’s leading cocoa processing hub, is capturing value through advanced industrial grinding into high-purity butter, powder, and liquor.

For lithium, China is controlling 71 per cent of global lithium processing while Indonesia has successfully banned raw exports of Nickel to force domestic smelting investment.

He concluded that “industrialisation is imperative, not optional” adding that Nigeria must “move from extraction to value creation and align policy, finance, and standards to build resilient, competitive economy.”

The necessity of value addition to commodity exports was a subject of discussion on June 16 at the Sterling Bank’s “Excel in Non-Oil Export Forum” with the theme “Reclaiming Sovereignty: Value Addition, Compliance, and the Future of Nigeria’s Non-Oil Export,” where economic and financial experts identified processing of raw materials, manufacturing, compliance to trade rules and export standards are the pathways to resilience in non-oil exports for Nigeria’s economy.

They argued that these pathways would accelerate Nigeria’s transition from a commodity-dependent economy to a globally competitive industrial powerhouse.

According to the experts, a large proportion of Nigeria’s 281 different non-oil products that are exported to over 20 countries remained raw commodities or semi-processed commodities.

They pointed out that export of raw cocoa beans generates billions of Naira in export value for Nigeria that is the fourth largest producer of cocoa beans globally with annual production levels ranging between 280,000 and 340,000 metric tonnes.  Whereas the world’s largest industrial manufacturer and supplier of chocolate that has its biggest factory in Belgium earned $17 billion revenue in 2025 and has a staff strength of 13,000.

Ironically, the cocoa tree cannot survive the temperate winter. So everything that they needed to manufacture chocolates and other derivatives comes from Africa and mainly from Nigeria.

Another example is cassava. Nigeria is the world’s largest producer of cassava at about 60 million metric tonnes annually. But these tonnes of cassava produced in Nigeria end up as fufu, tapioca, etc. in our homes while a lot more goes bad in post-harvest losses.

The Director Enterprise Development Centre, Pan-Atlantic University, Dr. Nneka Okekearu, said that for many years, Nigeria’s export story has been dominated by raw commodities. Yet the greatest opportunity before us is not simply to export more. It is to create more value before we export.

Okekearu stated that value addition creates jobs, increases income, strengthens competitiveness and ultimately, value addition helps nations build sustainable prosperity.”

She, however, noted that value addition alone is not enough because in today’s global marketplace, trust has become a currency because buyers want consistency, quality and reliability, which are reasons compliance, standards, and strong business systems matter.

“In our experience working with entrepreneurs, we have seen that businesses capable of competing globally are not necessarily the largest businesses. They are often the businesses that are disciplined, intentional, and committed to excellence.

“We have also seen inspiring examples of Nigerian businesses expanding beyond our borders—not simply by exporting products, but by exporting expertise, innovation, and solutions.

“These success stories remind us that Nigerian businesses can compete anywhere in the world when they are equipped with the right capabilities, the right partnerships, and the right mind set,” Okekearu said.

She noted that supporting exporters required more than providing finance. It includes creating platforms for knowledge sharing, market access, strategic partnerships, and business growth. 

So, “the future of Nigeria’s economy will not be determined solely by what we extract from the ground. It will increasingly be shaped by the value we create, the quality we deliver, and the confidence we inspire in global markets. 

“But if Nigeria is to realise the promise of its non-oil export sector, it will require more than ambition. It will require commitment, collaboration, and consistency.”

Speaking at the forum, Divisional Head, Commercial Banking at Sterling Bank, Mr. Akporee Idenedo, harped on the urgent need for a paradigm shift from raw commodity exports to value added exports.

For Idenedo, countries win today not by what they produce, but by how much they add before exporting. He said that value creation delivers foreign exchange earnings, more domestic export revenues and strong global competitiveness. 

He argued that “for the non-oil export segment of Nigeria’s economy to realise its trade potential, the country must move from exporting raw goods to exporting finished products that can compete on quality and value rather than just price.”

Speaking at the Nigerian-British Chamber of Commerce (NBCC) in May, the Chief Executive Officer of Johnvest Group, Mr. John Alamu, an operator of cocoa processing plant in Ondo State, said that Nigeria had been exporting raw cocoa beans for decades while foreign manufacturers are capturing 80 per cent of the global cocoa value chain.

Alumu explained that his company invested in processing and producing cocoa liquor, butter, and cocoa cake and powder. This enabled the company to export to Europe and North America at a value that is six times more than exporting raw cocoa beans while still providing it with the much-needed cocoa powder for local market.

Today, Johnvest has capacity to process 48,000 metric tonnes of cocoa beans annually in its facilities in Ondo State.

Alamu said|: “We are largest cocoa processor in Nigeria and an integrated value chain participant globally, coordinating food and commodities from where it is produced, add value and supply it where it is needed.

“The lesson is direct and transferable: value addition at the farm gate and processing level does not just improve profitability, it strengthens the entire food system. It creates stable demand for farmers, generates employment, and builds the supply chain resilience that food security requires.”

A Senior Fellow at the Lagos Business School (LBS), Dr. Doyin Salami, affirmed that value addition to commodity products is important but said that Nigeria should rethink its conception of trade sovereignty by moving away from historical import-substitution models toward building practical capabilities that would enable it to participate in global trade on better terms.

Salami noted that Nigeria currently ranked 130 out of 140 countries on the Economic Complexity Index because the country overwhelmingly exports raw materials rather than processed and finished goods.

He emphasised that if Nigeria should succeed in export markets, there are fundamentals that need to be addressed at both the macro and micro levels.

These fundamentals are compliance to domestic standards, compliance standards of countries that are our export destination and compliance to international obligations and international treaties.

“These are three levels of regulatory compliance that if we do not meet any one of them, we are done.  One of the key things is to domesticate recipient country regulation as part of the domestic regulatory environment. So that as you are complying with the domestic piece, you are already complying with the international piece,” Salami said.

He said that there is a correlation between processing of raw commodities and a country’s Trade Sovereignty Reclamation (TSR), which he defined as active process by which a nation progressively shifts from dependence on foreign producers, standard setters and gatekeepers towards self-determined participation in global trade.

According to him, TSR today is not about blocking imports or defying treaties. It is about building the practical capacity to participate in global trade on better terms, higher export complexity, stronger compliance infrastructure, deeper supply-chain control and fiscal independence from any single commodity.

He, therefore summed up that, “Every time you add processing before export, you reclaim a piece of sovereignty. Every time you get certified, you access a market that your competitor that isn’t cannot. Every bank that finances processing instead of just raw commodity trade is financing Nigeria’s sovereignty reclamation.”

He is not alone in the drive. Recently, Sterling Bank said it is committed to bridging the gap between policy and practice, ensuring that Nigeria’s wealth is grown, processed, and shipped to the world.  The bank has heavily invested in ecosystem development, notably through its Non-Oil Export Academy, designed in partnership with the Enterprise Development Centre (EDC) of Pan-Atlantic University, Lagos.

“At Sterling Bank, we recognise that true support for the non-oil sector goes beyond merely providing capital, and requires equipping businesses with the capability to use that capital effectively in highly regulated global markets.

“By providing entrepreneurs with robust training on   structured   trade   finance, letters of credit, compliance, risk management solutions, market   access   and   more, we are   actively   funding   the   transition   from   raw commodity exportation to high-margin, value-added manufacturing that will enable Nigeria dominate the over 1.3 billion consumer market unlocked by the AfCFTA,” the bank said.