Nigeria has proposed a new bill to grow the local manufacturing sector and reduce import dependency. The new bill passed first reading on the floor of the Senate yesterday. It seeks to protect local manufacturers from unfair competition and encourage the growth of the domestic industry.
In addition, the new bill seeks to prohibit the importation of raw materials that are available for local production. Also, the bill will ensure that no raw materials are exported from Nigeria without undergoing a minimum of 30% processing.
Furthermore, the bill will compel government agencies to maintain a list of raw materials that are locally available for local production and this shall be subject to periodic review.
The new bill comes amid a staggering inflation, rising cost of production and an uncertain economic environment. It is part of efforts to boost Nigeria’s economic diversification and generate non-oil revenue.
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The government has been introducing different policies to ease the operations of local businesses. Recall that the government recently announced a tax incentive for companies hiring more employees. With this new bill, the country intends to cut import dependency and encourage local manufacturing.
Nigeria is highly dependent on importation making its economy vulnerable to the volatile foreign exchange market. Also, the the recent unification of the exchange rate has made importation more expensive creating a ripple effect on the country’s inflation rate. Therefore, local manufacturing must be encouraged to cut import dependency and boost domestic growth.
