Dike Onwuamaeze
The Centre for the Promotion of Private Enterprise (CPPE) has urged the federal government to prioritise reforms that would expand domestic refining capacity and reject the World Bank’s advice that Nigeria should favour increased importation of petroleum products and food as a solution to Nigeria’s supply-side constraints.
The CPPE gave this advice yesterday in a press statement that expressed its strong reservation about the policy proposition by the World Bank in its recent “Nigerian Development Update,” which prescribed that Nigeria should resort to increased importation of petroleum products and food items.
It argued this prescription is deeply troubling and fundamentally misaligned with Nigeria’s current economic realities and reform trajectory.
The CPPE stated firmly that the desired policy direction is that Nigeria needed expansion of its domestic refining capacity and not more import licences for petroleum products.
The Chief Executive Officer of CPPE, Dr. Muda Yusuf, said in the press statement that “import liberalisation is not a sustainable solution to Nigeria’s supply-side challenges.
“On the contrary, it risks deepening structural vulnerabilities, accelerating de-industrialisation, and exposing the economy to greater external shocks.
“Nigeria’s development trajectory must be anchored on a production-driven growth model, characterised by strong domestic refining capacity, competitive manufacturing sector, robust agricultural systems, energy and food security.
“The CPPE therefore urged policymakers to reject import-dependent strategies and prioritise reforms that build a resilient, self-reliant, and industrialised Nigerian economy.”
Yusuf said that Nigeria’s policy momentum should be deliberate strengthening of the country’s measurable progress and gradual transition towards greater self-sufficiency in petroleum products supply that is driven by significant private investments in domestic refining capacity.
He argued that encouraging increased importation of petroleum products at this stage would risk reversing hard-won gains, exacerbate foreign exchange pressures, weaken domestic refining investments, and heighten the economy’s vulnerability to external shocks, particularly in a global environment that is characterised by geopolitical tensions and energy market volatility.
“The emphasis, therefore, should be on expanding and stabilising domestic production capacity, ensuring reliable crude supply to local refineries on competitive terms, and fostering an enabling environment for downstream sector investments.
“This is the pathway to sustainable energy security, economic resilience, and long-term industrial development, not a return to import dependence,” he said.
Yusuf noted the suggestion by the World Bank that Nigeria’s supply-side constraints could be addressed through increased imports runs counter to Nigeria’s long-term development aspirations.
“What the Nigerian economy urgently requires is a coherent industrial strategy that expands domestic production capacity, strengthens manufacturing competitiveness and deepens value chains across critical sectors.
“But import-driven solutions risk accelerating de-industrialisation, weakening the real sector, and undermining job creation prospects in an economy with a rapidly growing labour force,” he said.
Yusuf stated the assumption that trade liberalisation enhances competition failed to reflect the structural realities facing Nigerian producers.
These structural realities included poor logistics and transport infrastructure, high energy costs, elevated financing costs, with lending rates often exceeding 25–30 per cent, multiple taxation, fees, and regulatory burdens.
He therefore asserted that within this context, “the notion of ‘competition’ between imports and domestic production is both misleading and inequitable.
He said that what is being presented as market competition is, in reality, a structural asymmetry that places domestic producers at a significant disadvantage.
Yusuf said: “Nigerian refiners and other manufacturers operate in a high-cost environment while many foreign competitors benefit from far more enabling ecosystems, including state-backed subsidies, efficient infrastructure, and lower financing costs.
“This is not a level playing field. It is effectively a contest between structurally constrained local investors and globally competitive firms with systemic advantages.
“Such a framework cannot deliver efficient market outcomes; rather, it undermines domestic capacity, discourages investment, and perpetuates import dependence.”
He said that there are also legitimate concerns around the quality of imported petroleum products and the risk of dumping.
He said: “In the absence of robust quality assurance and trade safeguards, the domestic market could be exposed to substandard products, with implications for consumer protection, environmental standards, and the sustainability of local refining investments.
“A policy stance that tolerates such distortions not only weakens domestic industry but also compromises Nigeria’s long-term objective of achieving energy security, industrial self-reliance, and sustainable economic growth.”
Yusuf averred that sustainable competition should be fostered within a strengthened domestic industrial ecosystem, and not through exposure to import pressures.
He said the risks of import dependence are most evident in the energy sector where Nigeria’s historical reliance on imported petroleum products led to the collapse of domestic refining capacity, created a rent-seeking import regime with significant leakages and imposed an annual import burden estimated at between $10 billion and $15 billion at its peak.
According to him, recent developments in domestic refining, particularly the operationalisation of Dangote Refinery, have demonstrated Nigeria’s capacity to achieve self-sufficiency in petroleum products, subject to supportive policy frameworks.
He added the ongoing geopolitical tensions in the Middle East have further underscored the dangers of energy dependence.
Therefore, “encouraging importation at this stage would undermine investor confidence in local refining, weaken backward integration, and reverse progress towards energy security,” he said.
The CPPE also stated that the case against excessive food importation is equally compelling because it depresses farmgate prices, discourage investment in agriculture, erode rural incomes and livelihoods and undermines food system resilience.
It said that Nigeria’s food security strategy must be anchored on boosting domestic agricultural productivity, strengthening value chains, and improving market access, not on reliance on external supply channels.
Yusuf said that it is paradoxical, and indeed worrying, that the World Bank is urging Nigeria to embrace policy prescriptions that many advanced economies are increasingly retreating from.
He said that across the developed world, there is a clear resurgence of strategic protectionism and supply chain reconfiguration, which are driven by lessons from recent global disruptions, including the pandemic and ongoing geopolitical tensions.
Therefore, “recommending import liberalisation for countries still grappling with structural deficits and industrial fragility risks entrenching dependence, undermining local capacity, and stalling the industrialisation process,” Yusuf said
He said that the World Bank should recalibrate its policy advisory towards industrialisation-driven reforms, rather than import expansion.
He said that priority policy recommendations should include “expansion of domestic refining capacity and guaranteed crude supply to local refineries, targeted interventions to reduce production costs, especially energy and logistics, strengthening manufacturing ecosystems and industrial clusters.
“Enhancing agricultural productivity and agro-processing value chains, addressing structural bottlenecks constraining private sector production, promoting backward integration and local content development.
“These are the policy pathways that will deliver sustainable growth, job creation, and economic resilience.”
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