– Calls for strong tariff to protect domestic refineries
Dike Onwuamaeze
The Centre for the Promotion of Private Enterprise (CPPE) has commended the recently approved “2026 Fiscal Policy Measures and Tariff Amendments” as a calculated move to transition Nigeria from import dependent economy to industrial production.
The CPPE gave this commendation yesterday in its policy brief on “2026 Fiscal Policy Measures,” which stated that fiscal measures have created opportunities for deeper value-chain integration across manufacturing ecosystems by providing for higher tariffs on finished goods and lower tariffs on industrial inputs.
According to the centre, this has clearly signaled a structured industrialisation pathway and strengthened investors’ confidence in policy direction.
It also canvassed for instituting strong protective tariffs for locally refined petroleum products in order to safeguard investments and deepen backward integration in the petroleum sector.
It said: “The overarching message from the policy framework is clear: Nigeria is deliberately transitioning from an import-dependent economy to one anchored on domestic production and value addition.”
Commenting on the new fiscal measures, the Chief Executive Officer of CPPE, Dr. Muda Yusuf, said that “the 2026 fiscal policy measures represent a bold and necessary step towards economic restructuring, industrialisation, and enhanced economic resilience,” for the country.
Yusuf added: “For private investors, the framework presents substantial upside potential in manufacturing, agro-processing, recycling, and green industries.
“However, it also introduces risks for import-dependent sectors and consumer-facing businesses.
“Ultimately, the beneficiaries in this evolving policy landscape will be investors who align with the domestic production agenda, integrate into local value chains, and proactively adapt to Nigeria’s shifting economic structure.”
According to him, the recently approved fiscal policy framework by the federal government signaled a decisive and strategic pivot towards strengthening domestic production, deepening industrialisation, and reducing import dependence, which are consistent with Nigeria’s medium-term economic transformation objectives.
He said the measures included the revisions of the Import Adjustment Tax (IAT) that covered 192 tariff lines, selective import restrictions, tariff reductions on critical industrial inputs, excise duty adjustments, and the introduction of a green tax on selected categories of imported vehicles.
He added the national list that comprised of 127 items that are largely intermediate goods and industrial inputs, which attracts concessional tariffs of 0–10 per cent, is aimed at enhancing manufacturing competitiveness, adding that it “provides a significant cost advantage for producers and aligns with global industrial policy best practices, where input cost competitiveness is critical for export readiness.”
The CPPE noted that a major highlight of the policy is the upward review of tariffs on a broad range of imported finished goods such as food, plastics, textiles, and metal products, which set their combined tariff and levies at between 20 per cent and 70 per cent.
It said that “this measure 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, this policy has the potential to materially reshape market dynamics.”
It also stated that this would create strong incentives for investors to expand their domestic manufacturing capacity, increase investment in import-substitution industries and enhance backward integration across value chains.
Yusuf pointed out that sectors such as agro-processing, light manufacturing, packaging, and basic metals are particularly suited to benefit from the new fiscal policy regime.
He said: “The policy is expected to improve capacity utilisation—currently suboptimal in many manufacturing sub-sectors and enhance pricing power for domestic firms.”
He stated further that the deliberate reduction of tariffs on industrial inputs, particularly machinery, chemicals, and intermediate goods, reflected a strategic effort to lower production costs and enhance competitiveness.
The CPPE also made a compelling case for strengthening fiscal protection for investments in domestic petroleum refining to consolidate recent gains and catalyse new capital inflows into the sector.
It said that currently, domestic refineries operate with virtually no tariff protection, which it identified as an evident policy gap when compared to other segments of the industrial sector.
“Instituting protective tariffs for locally refined petroleum products is, therefore, critical to safeguarding these investments, deepening backward integration, enhancing energy security, conserving foreign exchange, and reinforcing economic resilience and macroeconomic stability,” the CPPE said.
The CPPE also called for a review of the 40 per cent tariff on used passenger vehicles, particularly those with engine capacity of 2000cc and below.
It said that the 40 per cent tariff is excessively high for an economy that relied predominantly on road transportation for mobility and logistics.
It said: “The tariff has significant welfare and employment implications, as it constrains access to vehicle ownership for the middle class and undermines job creation potential in the e-hailing and car hire ecosystem at a time of elevated unemployment.
“CPPE recommends that import tariffs on this category of vehicles should be reduced to a maximum of 25 per cent inclusive of all charges.”
The center stated that a more supportive tariff regime for the automotive assembly sector is imperative.
It recommended that Semi Knocked Down (SKD) parts should attract a tariff of not more than 5.0 per cent, while Completely Knocked Down (CKD) parts should be zero-rated.
This would enhance the viability and competitiveness of local automobile assembly, with positive outcomes for industrialisation, employment, and value-chain development.
“In response to rising transportation costs, CPPE recommends reducing import duty on mass transit buses to 5.0 per cent and granting a full VAT waiver.
“This would incentivise private sector investment in mass transit, encourage employers and public institutions to provide staff transportation, and stimulate government investment in public mobility. The overall effect would be to ease the burden of high transport costs on citizens,” it said.
CPPE also advocates a reduction in tariffs on renewable energy equipment, particularly batteries and inverters, to improve access to clean and reliable energy.
Yusuf, however, said that while the policy strongly supports domestic production, it presents significant adjustment challenges for import-dependent businesses.
He said that import-dependent sectors, especially trading and wholesale distribution, would be faced with structural transition risks as the economy pivots towards production.
🚨 BREAKING: Watch the full clip here ➤
