Category: Business

The 15 per cent import duty on refined petroleum products has been hailed as a positive policy proposition capable of catalysing industrial expansion, conserve foreign exchange, create jobs, promote economic resilience of the country if complemented with broader industrial support measures. Welcoming the 15 per cent import duty on refined petroleum products, that is petrol and diesel—is therefore a welcome development and a progressive and corrective measure.

Besides, the 15 per cent import duty on refined petroleum imports is a modest policy support needed to protect domestic refineries such as Dangote Refinery, NNPCL refineries and emerging modular refineries to thrive, restore Nigeria’s refining capacity and reduce foreign exchange exposure.

This was the submission yesterday by the Centre for the Promotion of Private Enterprise (CPPE), an economic policy advocacy group, describing the 15 per cent import duty on refined petroleum products, as a “welcome development, a progressive and corrective measure.”

Examining the import duty policy on refined petroleum products in its position paper, the Group noted that the country’s excessive dependence on imports over the past few decades has weakened its productive base, eroded competitiveness and exposed the economy to external shocks.

According to the CPPE, the continuous importation of petroleum products over the past two decades has imposed immense costs on the Nigerian economy, whose consequences include sustained pressure on foreign exchange reserves, fiscal instability and the collapse of domestic refining.

Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, noted that the policy will help the country achieve industrialisation, which is said, is central to Nigeria’s long-term economic growth, job creation and national sovereignty. He insisted that countries deliberately implement protectionist policies for its industrial growth and therefore, the federal government in right to implement policies that will ensure survival, growth and sustainability of indigenous industries.

“History and global experience show that no country has achieved industrialisation through indiscriminate trade liberalisation. The CPPE therefore advocates for strategic protectionism—a calibrated policy approach that safeguards domestic and emerging industries while building competitiveness and self-sufficiency particularly in key industrial sectors, as the foundation for Nigeria’s industrialisation drive,” Yusuf.

According to him, an economist, sectors that enjoyed measured protection—such as cement, flour and beverages have recorded remarkable domestic growth and value addition. For instance, he explained that in flour milling, the combined import charges exceed 70 per cent, fostering backward integration and domestic capacity expansion. In  agro-processing, the average import tariffs which is above 30 per cent, has stimulated local production and employment; while in pharmaceuticals, the import restrictions on selected product groups have promoted health sovereignty and encouraged local manufacturing.

He said that while concerns about short-term price increases are valid, they are transitional as the long-term solution lies not in liberalising imports but in improving domestic efficiency. Besides, he explained that as domestic industries scale up, production costs will decline, leading to price stabilisation and consumer welfare gains.

He said: “So in this context, a 15 per cent duty on refined petroleum products is modest, balanced and necessary to restore Nigeria’s refining capacity and fiscal resilience.

“Exposing local industries to global competition without addressing structural constraints is not desirable and legitimate competition—it is policy-induced disadvantage. Nigerian manufacturers face high energy costs, weak infrastructure, limited access to finance, inefficient ports and complex regulatory frameworks.

“Producers in advanced economies, by contrast, enjoy subsidised energy, efficient logistics, and low-interest financing. Without correcting this imbalance, Nigerian firms cannot compete fairly. Genuine competition requires comparable production conditions, not a contest between subsidized imports and under-supported domestic producers,” the CPPE boss argued.

According to him, Nigeria’s prolonged dependence on imports has created deep structural distortions. The absence of effective protection and inadequate support for local producers, he insisted, has discouraged investment and led to decades of deindustrialisation.

This failure, he said, is well epitomised in the oil and gas sector given the  decades of refined product importation which has drained the country’s foreign reserves, weakened fiscal stability and eroded economic sovereignty.

Urging that Nigeria’s journey to sustainable industrialisation must be anchored on strategic, time-bound protectionism, not indiscriminate liberalisation because no country has industrialised through unrestrained exposure to imports, Yusuf said the country must adopt a competition model that prioritises domestic production over import dependence, where producers can compete with fellow producers, not with importers. Besides, he advocated that both indigenous and foreign investors should be encouraged to produce locally through clear, consistent and performance-based policies. This approach, which he said has been successfully applied in the cement, flour and beverage industries, can be replicated across sectors to achieve self-sufficiency and export readiness within a decade.

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Reemphasising the need for developing economies like Nigeria requires a measured degree of protectionism for industrial take-off, Yusuf pointed to the Asian countries’ success stories- China, South Korea, India and Malaysia, who built their industrial strength through inward-looking strategies during their formative decades. “They protected infant industries, promoted local content, and developed domestic value chains before gradually opening up to global competition. Even the United States, the world’s largest economy, has recently adopted protectionist industrial policies to bolster its manufacturing base,” Yusuf said.

To institutionalise a balanced and growth-oriented protectionist framework, CPPE recommended that the federal government should sustain the 15 per cent import duty on refined petroleum products to protect and incentivise investment in domestic refining; complement tariff protection with industrial support policies, including low-cost financing, energy access and improved logistics to prevent price escalation; expand backward integration incentives in petrochemicals, steel, agro-processing and pharmaceuticals; strengthen monitoring and evaluation to ensure protection fosters productivity, innovation and price moderation; and transition to export competitiveness once domestic industries attain stability, ensuring protection is performance-based and time-bound.

While the CPPE admits that industrialisation is a gradual process that begins with consolidating the domestic market, progresses through regional expansion and culminates in global competitiveness, it explained that strategic protectionism provides the enabling environment for this evolution.

The Group noted that by shielding emerging industries from premature exposure to unfair competition, strategic protectionism encourages domestic investment, fosters local value addition and allows firms to achieve efficiency and scale before competing globally.

It added that for Nigeria, this approach should not be seen as “economic isolation or the creation of monopolies”, but should rather be seen as a “self-strengthening strategy to ensure the domestic economy develops sufficient capacity to compete effectively on the global stage.”

Yusuf noted that a properly designed protectionist measures deliver broad developmental dividends. These, he noted to include stimulating industrial growth and job creation; conserve foreign exchange and stabilise the naira; promote backward integration and local value addition; enhance macroeconomic and fiscal resilience; encourage innovation, technology transfer and long-term competitiveness.

Therefore, to ensure protection yields sustainable benefits, government must complement it with fiscal incentives and targeted subsidies; access to low-cost financing; reliable and affordable energy supply; strategic infrastructure investment and streamlined regulatory processes.

“Ultimately, strategic protectionism supports national self-reliance while laying the foundation for globally competitive industries,” Yusuf said.