The Centre for the Promotion of Private Enterprise (CPPE) has warned that Nigeria’s continued importation of refined petroleum products remains one of the country’s biggest economic weaknesses, draining foreign reserves and worsening fiscal instability.
To address this, the organisation said it supports the recent 15% import duty imposed on refined petroleum products, describing it as “a positive and corrective measure” that could spur investment in local refining, conserve foreign exchange, and stimulate job creation.
In a new policy brief, CPPE CEO, Dr. Muda Yusuf, noted that Nigeria’s prolonged dependence on imports has weakened its productive base, undermined competitiveness, and left the economy vulnerable to external shocks.
The organization argued that industrialization cannot be achieved through “indiscriminate trade liberalization,” urging policymakers to adopt a calibrated protectionist framework that nurtures emerging industries while building competitiveness over time.
“No country has achieved industrialization through unrestrained exposure to imports,” CPPE stated. “Strategic protectionism is not economic isolation—it is a pathway to global competitiveness through domestic strength.”
Learning from Asian models
Drawing parallels with global examples, CPPE noted that industrial success stories such as China, South Korea, and Malaysia relied heavily on protectionist measures during their formative decades. These countries, the group explained, safeguarded their infant industries, promoted local content, and gradually opened up to global competition after building sufficient internal capacity.
The report also cited the United States’ recent industrial policies, including subsidies and local manufacturing incentives, as evidence that protectionism remains a legitimate tool for economic growth, even in advanced economies.
CPPE stressed that Nigeria must take a similar approach, emphasizing that “producers should compete with fellow producers, not importers.” It added that both local and foreign investors should be encouraged to manufacture within the country rather than rely on imports.
Oil and gas: A case for local refining
The organization described the continued importation of refined petroleum products as one of Nigeria’s most damaging economic weaknesses, resulting in a persistent drain on foreign reserves and fiscal instability.
It welcomed the 15% tariff as a timely policy intervention that could help restore domestic refining capacity.
“This modest protection will enable refineries such as Dangote Refinery, NNPCL refineries, and modular operators to thrive,” CPPE noted. “It is a balanced and necessary step toward energy self-sufficiency and economic resilience.”
The brief compared the oil sector with other industries that benefited from structured protection, including flour milling, agro-processing, and pharmaceuticals—all of which recorded growth, backward integration, and local value addition following tariff adjustments.
Balancing protection with competitiveness
CPPE emphasized that exposing local manufacturers to global competition without addressing structural challenges, such as high energy costs, poor infrastructure, and limited access to finance, creates what it called “policy-induced disadvantage.”
To ensure that protectionist policies yield long-term gains, the group recommended complementary measures, including low-cost financing, reliable energy supply, infrastructure investment, and streamlined regulations.
“Protection must be strategic, time-bound, and performance-based,” the CPPE advised. “Once domestic industries achieve stability, Nigeria should transition to export competitiveness.”
The center also called for enhanced monitoring and evaluation mechanisms to ensure that protection encourages innovation, productivity, and price moderation rather than rent-seeking or inefficiency.
Toward a self-reliant industrial future
In conclusion, CPPE urged the federal government to sustain the 15% import duty on refined petroleum while expanding similar industrial support to sectors like steel, petrochemicals, and agro-processing.
It maintained that disciplined protectionism—anchored on clear performance targets—can transform Nigeria’s industrial landscape and strengthen economic sovereignty.
“The goal is not to shut out the world,” the policy brief concluded, “but to empower Nigeria to engage it from a position of strength.”
What you should know
On Friday, the presidency explained that the recently introduced 15% import duty on petrol and diesel was designed to make these imported products less competitive and encourage local refining.
- It stated that the policy will also boost domestic capacity and ensure that Nigeria’s oil wealth translates directly into national prosperity.
- Special Adviser to the President on Media and Public Communication, Sunday Dare, stated that this will reverse the disturbing trend of Nigeria’s heavy reliance on imported petroleum products despite being a leading crude oil producer and conserve foreign exchange.
