Dare Babalola
The Centre for the Promotion of Private Enterprise has cautioned against growing calls for unrestricted importation of petroleum products, warning that such a policy could undermine Nigeria’s industrialisation drive and weaken the country’s economic sovereignty.
In a statement issued on Sunday, the Chief Executive Officer of the organisation, Muda Yusuf, said Nigeria must avoid policy decisions capable of discouraging domestic refining investments, especially at a time the country is trying to strengthen local production capacity.
According to the CPPE, excessive dependence on imports has historically damaged the Nigerian economy through pressure on foreign reserves, weakening of the naira, collapse of local industries and increased fiscal burdens linked to fuel subsidies.
The organisation noted that during the peak of the fuel subsidy regime, Nigeria spent trillions of naira subsidising imported petroleum products while also spending more than $10 billion annually on fuel imports.
It said the situation contributed to persistent exchange rate pressure, widening trade deficits, weak industrial competitiveness, investor uncertainty and broader macroeconomic instability.
“It would therefore be economically imprudent to recreate the very conditions that previously weakened the economy,” the statement said.
The CPPE argued that no country has achieved industrial development through excessive import dependence, stressing that prosperous economies are built on domestic production, refining, manufacturing and value addition.
Drawing comparisons with countries such as the United States, China, India and members of the European Union, the group said major economies continue to protect strategic industries through tariffs, subsidies and industrial policies designed to strengthen local production.
The organisation described self-reliance as an economic necessity rather than isolationism, insisting that energy security remains critical to national security.
According to the statement, unrestricted importation of refined petroleum products could threaten recent investments in Nigeria’s refining sector, including the establishment of the Dangote Refinery and several modular refineries across the country.
The CPPE said such investments should receive strategic support instead of facing policy uncertainty capable of discouraging future industrial commitments.
“What message are we sending to investors if a multi-billion-dollar refinery investment of continental significance is confronted with regulatory uncertainty and policy headwinds?” the organisation queried.
The group maintained that the solution to market competition was not increased importation but the encouragement of additional domestic refining investments.
It also defended calls for fiscal protection of local refineries, noting that Nigeria already provides tariff protection and import adjustment taxes for several manufacturing sectors, including pharmaceuticals, textiles, cement, chemicals, automobile assembly and food processing.
The organisation further argued that local manufacturers operate under harsh structural conditions such as high energy costs, poor infrastructure, multiple taxation, expensive financing, logistics bottlenecks and foreign exchange volatility, while foreign producers often enjoy more supportive production environments.
According to the CPPE, exposing domestic industries to unrestricted foreign competition under such unequal conditions would accelerate deindustrialisation rather than improve efficiency.
The organisation cited the collapse of several Nigerian industries, including tyre manufacturing companies like Dunlop and Michelin, textile mills, battery firms, automobile assembly plants and pharmaceutical companies, as examples of the dangers of indiscriminate import liberalisation.
It also warned that the implementation of the African Continental Free Trade Area could further threaten local industries if urgent measures were not taken to improve domestic competitiveness.
The CPPE dismissed claims portraying the Dangote Refinery as a monopolistic threat, arguing that the refinery’s dominance was largely a result of its scale and investment capacity rather than anti-competitive practices.
“Scale creates competitiveness. Scale lowers unit costs. Scale deepens value chains. Scale strengthens economic resilience. Scale should not be criminalised,” the statement added.
The organisation further stressed that continued dependence on imported petroleum products would amount to exporting jobs, weakening local value chains and increasing pressure on foreign exchange reserves.
By contrast, it said domestic refining would improve energy security, conserve foreign exchange, create jobs and strengthen macroeconomic stability.
The CPPE also referenced Nigeria’s recent food importation experience, warning that excessive liberalisation in the agricultural sector disrupted local farming and weakened incentives for domestic production despite temporary price relief for consumers.
It warned against repeating similar policy mistakes in the refining sector.
The organisation concluded by urging the Federal Government to remain committed to policies that promote domestic production, industrial growth and economic resilience through strategic protection, policy consistency and support for local investors.
