The Centre for the Promotion of Private Enterprise (CPPE) has strongly endorsed the recent 15% import duty imposed on refined petroleum products, describing it as a vital, progressive policy that marks a decisive pivot toward strategic protectionism necessary for Nigeria’s industrial take-off. The CPPE asserts that sustained, calibrated protection is essential to achieve long-term economic growth, massive job creation, and genuine national sovereignty.
Industrialisation is the undisputed cornerstone of sustainable economic transformation, but global history confirms that no nation—from Asian economic giants like China and South Korea to early industrial powers like the United States—achieved this through indiscriminate trade liberalisation. Nigeria’s decades-long dependence on imports has critically weakened its productive base and exposed the economy to severe external shocks.
The CPPE advocates for a strategic protectionist framework—a measured policy approach designed to shield emerging domestic industries from premature exposure to unfair competition, thereby fostering local value addition and allowing firms to achieve efficiency and scale.
The Case for Oil and Gas Sector Reform
The continuous importation of refined petroleum products over the past two decades has imposed immense costs on the Nigerian economy, notably draining foreign exchange reserves, destabilizing the Naira, and causing the collapse of domestic refining capacity.
The introduction of the 15% import duty on refined petrol and diesel is a welcome, corrective measure. This modest level of protection provides essential policy support, allowing domestic refineries—including Dangote Refinery, NNPCL refineries, and emerging modular refineries—to thrive. It is a critical step towards restoring Nigeria’s refining capacity and dramatically reducing exposure to foreign currency volatility.
Evidence from Protected Sectors
Nigeria’s own industrial history provides clear evidence that measured protection yields transformative outcomes. Sectors that received structured support have recorded remarkable domestic growth and enhanced value addition:
- Cement: High combined import charges have successfully fostered backward integration and domestic capacity expansion, making Nigeria a net exporter.
- Agro-Processing and Flour Milling: Import tariffs exceeding 30% or more have stimulated massive local production, created jobs, and ensured food security and stability in those value chains.
- Pharmaceuticals: Import restrictions on specific product groups have been instrumental in promoting health sovereignty and encouraging local investment in manufacturing.
In this context, a 15% duty on refined petroleum products is balanced, necessary, and modest compared to other thriving domestic sectors.
Leveling the Playing Field
CPPE underscores that protectionism is not an isolationist policy, but a self-strengthening strategy. Exposing local industries to heavily subsidized and efficiently produced global imports, without addressing domestic constraints, is not legitimate competition—it is a policy-induced disadvantage.
Nigerian manufacturers contend with formidable structural hurdles, including high energy costs, deficient infrastructure, limited access to low-cost finance, and complex regulatory frameworks. Foreign competitors, conversely, benefit from subsidised inputs, superior logistics, and low-interest rates. Genuine competition can only occur when there are comparable production conditions, and strategic protection helps correct this fundamental imbalance.
Industrial and Macroeconomic Payoffs
Properly designed protectionist measures deliver broad developmental dividends: they stimulate industrial growth and job creation, conserve foreign exchange and stabilize the Naira, promote backward integration and local value addition, and enhance macroeconomic and fiscal resilience.
“The 15% duty on refined products is not merely about supporting a single refinery; it is a sector-wide proposition that sends a strong signal to all current and future domestic investors in refining,” said Dr Muda Yusuf. “Protectionism, when pragmatic and disciplined, empowers Nigeria to engage the world from a position of strength, laying the foundation for globally competitive industries within the next decade.”
Managing the Transition and Policy Recommendations
While CPPE recognises valid concerns about short-term price effects, the long-term solution lies in boosting domestic efficiency, not in perpetual import liberalisation. To ensure the tariff yields sustainable benefits, the government must immediately complement it with non-tariff support measures.
CPPE urgently recommends the following policies:
- Sustain the 15% Import Duty: Maintain this tariff to protect and incentivise investment in domestic refining capacity.
- Complementary Support: Provide low-cost financing, reliable and affordable energy supply, and strategic infrastructure investment to prevent undue price escalation and boost operational efficiency.
- Expand Backward Integration Incentives: Extend performance-based incentives to key sectors like petrochemicals, steel, agro-processing, and pharmaceuticals.
- Performance Monitoring: Strengthen monitoring to ensure protection fosters productivity, innovation, and price moderation, ensuring the protection remains time-bound and performance-based.
Nigeria must adopt a competition model that prioritises domestic production over import dependence. By encouraging indigenous and foreign investors to produce locally through clear, consistent, and performance-based policies, Nigeria can replicate the self-sufficiency successes seen in the cement and beverage industries.
