Dare Babalola
The Centre for the Promotion of Private Enterprise (CPPE) has called for carefully calibrated tariff adjustments to strengthen Nigeria’s domestic refining capacity, improve transportation mobility, and widen access to renewable energy across the country.
In a statement issued on Sunday, CPPE Chief Executive Officer, Muda Yusuf, reacted to the 2026 Fiscal Policy Measures and Tariff Amendments, describing the framework as a strategic pivot toward domestic production, deeper industrialisation, and reduced reliance on imports.
Yusuf noted that the policy package—covering revisions to the Import Adjustment Tax across 192 tariff lines, selective import restrictions, reduced duties on industrial inputs, excise changes, and green taxes on imported vehicles—presents both opportunities and risks, depending on sector exposure and business models.
He pointed out that higher tariffs on imported finished goods, including food items, plastics, textiles, and metals, now attract combined levies ranging between 20 and 70 per cent.
“This measure raises import costs and strengthens domestic producers’ competitiveness. Given the economy’s reliance on imports, the policy could significantly reshape market dynamics,” Yusuf said.
According to him, sectors such as agro-processing, light manufacturing, packaging, and metals stand to benefit from improved capacity utilisation. However, he cautioned that businesses heavily dependent on imports may struggle to adjust, as rising costs could squeeze profit margins and dampen sales volumes.
Yusuf also expressed concern over what he described as a relatively weak fiscal stance on petroleum product imports, warning that the absence of adequate tariff protection for local refineries could undermine recent gains in the sector.
“Protective tariffs for locally refined products are vital for investment security, energy stability, foreign exchange conservation, and macroeconomic strength,” he said, noting that the current framework leaves domestic refiners at a disadvantage compared to other protected sectors.
On mobility, the CPPE boss called for a review of the 40 per cent tariff on used vehicles with engine capacities below 2000cc, arguing that cumulative charges push effective rates above 50 per cent.
He warned that such high costs restrict access to vehicles in a road-dependent economy and negatively impact employment in sectors like ride-hailing and car hire services. Yusuf recommended a reduction in total tariffs on such vehicles to a maximum of 25 per cent.
Addressing the automotive industry, he advocated a more supportive tariff regime to boost local assembly, proposing duties not exceeding five per cent on semi-knocked-down (SKD) parts and zero duty on completely knocked-down (CKD) components.
He further urged the government to cut tariffs on mass transit buses to five per cent and grant a full Value Added Tax waiver, saying the move would encourage private sector investment in staff transportation and ease commuting challenges.
On renewable energy, Yusuf called for lower import duties on key equipment such as batteries and inverters, recommending a five per cent tariff alongside full VAT waivers to improve affordability.
He noted that current costs remain prohibitive for households and small businesses, adding that easing tariffs would provide viable alternatives to unreliable grid electricity and enhance productivity.
“The 2026 fiscal measures mark a bold step towards restructuring, industrialisation and resilience. For investors, there is strong potential in manufacturing and green industries, but risks remain for import-dependent and consumer-facing sectors,” Yusuf stated.
