The Centre for the Promotion of Private Enterprise (CPPE) has undertaken a comprehensive review of the Federal Government’s 2026 Fiscal Policy Measures and Tariff Amendments, describing the framework as a bold and strategic pivot towards strengthening domestic production, accelerating industrialisation, and reducing Nigeria’s dependence on imports. According to the Centre, the policy direction aligns with the country’s medium-term economic transformation objectives and reflects a deliberate shift towards building a more resilient, production-driven economy.
In a statement signed by Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, the policy package introduces far-reaching reforms, including revisions to the Import Adjustment Tax (IAT) across 192 tariff lines, selective import restrictions, tariff reductions on key industrial inputs, excise duty adjustments, and the introduction of a green tax on selected categories of imported vehicles. In addition, a National List of 127 items—largely intermediate goods and industrial inputs—has been created, attracting concessional tariffs ranging between zero and ten percent. CPPE notes that these measures collectively signal a structured and coherent industrial policy framework aimed at enhancing manufacturing competitiveness.
A major highlight of the policy is the upward review of tariffs on a broad range of imported finished goods, including food, plastics, textiles, and metal products, with combined tariffs and levies now ranging between 20 percent and 70 percent. This development significantly raises the landing cost of imports and strengthens the competitive position of domestic producers. Given Nigeria’s continued reliance on imports across several consumption categories, CPPE believes the policy has the potential to reshape market dynamics by creating strong incentives for the expansion of local manufacturing capacity, deeper backward integration across value chains, and increased investment in import-substitution industries. Sectors such as agro-processing, light manufacturing, packaging, and basic metals are expected to benefit from improved capacity utilisation and enhanced pricing power.
At the same time, the deliberate reduction of tariffs on industrial inputs such as machinery, chemicals, and intermediate goods is seen as a strategic move to lower production costs and boost industrial growth. The concessional tariff regime under the National List provides a significant cost advantage for manufacturers and aligns with global best practices, where competitive input costs are essential for export readiness. CPPE highlights that the combination of higher tariffs on finished goods and lower tariffs on inputs demonstrates policy coherence and reinforces investor confidence in the government’s industrialisation agenda.
However, while the policy strongly supports domestic production, it presents adjustment challenges for import-dependent businesses, particularly those engaged in trading and wholesale distribution. Higher tariffs on finished goods are expected to increase the cost of goods and raise working capital requirements, which could lead to margin compression, reduced sales volumes, and the need for business model restructuring. As the economy pivots towards production, these sectors face structural transition risks that will require strategic adaptation.
The Centre also raises concerns about the relatively soft fiscal stance on petroleum product imports, noting that stronger tariff protection is necessary to consolidate recent investments in domestic refining. Enhanced fiscal protection, CPPE argues, would encourage further private investment, support energy self-sufficiency, reduce foreign exchange pressures, and improve the balance of trade.
To strengthen the overall impact of the reforms, CPPE recommends several policy adjustments. These include the introduction of protective tariffs for locally refined petroleum products, a review of the current tariff regime on used passenger vehicles—particularly those with engine capacity of 2000cc and below—with a recommendation to reduce the effective rate to a maximum of 25 percent, and the implementation of a more supportive tariff structure for the automotive assembly sector by reducing tariffs on Semi Knocked Down parts to five percent and zero-rating Completely Knocked Down parts. The Centre also advocates for a reduction in import duties on mass transit buses to five percent, alongside a full VAT waiver, to promote investment in public transportation and ease mobility challenges. In addition, CPPE calls for lower tariffs on renewable energy equipment, particularly batteries and inverters, to improve access to clean and reliable energy for households and businesses.
From an investor perspective, CPPE emphasises that the overarching message of the policy framework is clear: Nigeria is transitioning from an import-dependent economy to one anchored on domestic production and value addition. In this evolving landscape, investors are encouraged to reposition towards production-oriented investments, deepen local sourcing and backward integration, focus on sectors aligned with industrial policy priorities, and build operational flexibility to navigate changing tariff regimes. Strategic partnerships, technology transfer, and cluster-based investments will be critical to maximising opportunities.
In conclusion, CPPE describes the 2026 fiscal policy measures as a bold and necessary step towards economic restructuring, industrialisation, and enhanced resilience. While the framework presents significant opportunities in manufacturing, agro-processing, recycling, and green industries, it also introduces risks for import-dependent and consumer-facing sectors. Ultimately, the Centre notes that the greatest beneficiaries will be those investors and businesses that align with Nigeria’s domestic production agenda, integrate into local value chains, and proactively adapt to the country’s shifting economic structure.
