Nigeria’s economic structure has long been characterized by a heavy reliance on the export of unprocessed raw materials. For decades, commodities such as crude oil, cocoa, rubber, cotton, and solid minerals have been exported in their raw form, generating revenue but contributing little to industrial development, job creation, or sustainable growth.

This pattern has left the country vulnerable to global commodity price shocks and perpetuated a cycle of underdevelopment in its manufacturing base.

In response to this persistent challenge, the Senate recently passed a landmark bill mandating that all raw materials intended for export must be processed locally to a minimum threshold of 30% before they are exported.

This legislation represents a major shift in our nation’s trade and industrial policy, aiming to reposition the country from a raw-material exporting economy to a value-adding, production-driven one. At the core of this ambitious policy, however, lies a critical factor that will determine its success or failure: the role of directors in export-oriented firms.

Directors, particularly those at the board and executive levels, serve as the custodians of corporate strategy, compliance, and long-term vision. They are the gatekeepers of decisions that influence how firms respond to national policy mandates.

In the case of this new 30% pre-export processing policy, directors are uniquely positioned to influence the internal dynamics of its implementation. Their understanding of the policy, risk assessment skills, and dedication to aligning with national economic goals are crucial in determining whether a company views compliance as a strategic priority or as an external burden.

The bill provides a clear framework for compliance and enforcement. Exporters who fail to meet the 30% processing requirement will face serious consequences, including a 15% levy on the export value of the raw materials.

In addition, non-compliant firms risk suspension or revocation of their raw material value addition certificate, which is an essential document required for legal export. Perhaps most significantly, such exports will be classified as “smuggled goods,” attracting penalties under Nigeria’s Customs and trade regulations. These are not minor infractions; they carry the weight to damage a company’s reputation, restrict its market access, and invite costly legal battles.

Given these high stakes, directors must take a proactive approach. Their leadership responsibilities now extend beyond the boardroom to the factory floor, the supply chain, and regulatory engagement.

They must ensure strategic alignment, that is, integrating the processing requirement into the firm’s long-term business model, possibly by investing in in-house processing facilities or forming partnerships with local manufacturers. This strategic shift could also involve rethinking supply chain logistics, operational timelines, and technology adoption.

Furthermore, resource allocation is a key area where directors’ influence is most visible. Approving capital expenditures for processing infrastructure, allocating funds for workforce training, and investing in research and development are decisions that rest at the top of corporate hierarchies.

These actions are necessary not only for compliance but also for turning regulatory requirements into competitive advantages. Firms that successfully process and export higher-value products are more likely to command better prices, access niche international markets, and build brand equity for Nigerian-made goods.

Directors are also central to establishing robust monitoring and control mechanisms that ensure regulatory compliance. This may involve the creation of compliance units within the firm, regular audits, internal reporting systems, and direct communication channels with agencies such as the Nigerian Export Promotion Council (NEPC), the Standards Organisation of Nigeria (SON), and the Nigerian Customs Service. Firms that institutionalize these practices are better positioned to avoid penalties, maintain export certification, and build a reputation for reliability in the global marketplace.

However, the journey toward full implementation is fraught with challenges. Many export-oriented firms, particularly small and medium enterprises, face capital constraints that make investment in processing facilities difficult.

Even when capital is available, technical expertise at the board level may be limited, especially in areas such as processing technologies, industrial operations, and regulatory risk.

Directors may also contend with uncertainty stemming from vague policy guidelines, inconsistent enforcement, or infrastructural bottlenecks such as poor electricity supply and limited access to industrial zones.

In such a complex environment, the quality of leadership becomes paramount. Directors who embrace their role as economic actors and stewards of national progress are more likely to navigate these challenges successfully.

Rather than waiting passively for clarity from regulators, they can actively seek strategic partnerships, such as joint ventures with processing firms, public-private initiatives, or cooperative arrangements with agricultural and mining clusters. These alliances can help reduce costs, share risks, and create economies of scale in processing operations.

The objectives of the bill are clear and ambitious. It aims to promote value addition by encouraging local industries to process raw materials, thereby increasing their export value. It seeks to stimulate economic growth through domestic manufacturing, job creation, and the retention of more wealth within the Nigerian economy.

It is also designed to reduce import dependency by building local capacity to produce materials that are currently being imported. Lastly, the policy is expected to enhance export quality, ensuring that Nigerian products meet global standards and are more competitive in international markets.

However, these objectives cannot be realized through legislation alone. This could take the form of tailored policy briefings, executive training programs, and targeted incentives that support compliance. Equally important is the need for consistent enforcement, policy clarity, and infrastructural development to make compliance not only possible but commercially viable.

Export firms, on their part, must invest in leadership development, ensuring that their boards are equipped with the knowledge and foresight to navigate the regulatory landscape. They must also embed flexibility into their governance structures to adapt quickly to evolving trade policies and industrial expectations.

The directive mandating 30% pre-export processing of raw materials represents more than just a policy shift; it is a call for strategic leadership and national alignment. Directors stand at the intersection of public policy and private enterprise.

The choice to lead boldly or to resist passively will shape not only the future of their companies but also the broader trajectory of Nigeria’s economic transformation. As the country aspires to move up the global value chain, directors must rise as agents of compliance, innovation, and industrial rebirth.

Research & Advocacy Department,
Chartered Institute of Directors (CIoD)