CPPE cautions Nigeria against World Bank’s advocacy for increased fuel and food importation

The Centre for the Promotion of Private Enterprise (CPPE) has cautioned against the World Bank’s recommendation to increase the importation of fuel and food, warning that such a policy could undermine Nigeria’s economic stability and industrial growth.

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In a statement signed by its Chief Executive Officer, Muda Yusuf, and issued on Sunday, the CPPE described the recommendation in the World Bank’s Nigerian Development Update as “deeply troubling and fundamentally misaligned” with Nigeria’s current economic realities and reform.

The organisation stressed that at a time the country is recording improvements in foreign reserves, inflation, and exchange rate stability, policy efforts should focus on strengthening domestic production rather than increasing import dependence.

The CPPE emphasised that Nigeria’s gradual move towards self-sufficiency in petroleum products should not be reversed through increased fuel and food imports.

It added that the priority should be expanding domestic refining capacity, ensuring a reliable crude supply to local refineries, and supporting downstream investments.

“Nigeria is gradually transitioning towards greater self-sufficiency in petroleum products supply, driven by significant private investments in domestic refining capacity.

“This momentum should be strengthened through deliberate policies that support local production, enhance value addition, and deepen industrial linkages within the economy.

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“Encouraging increased importation of petroleum products at this stage risks reversing hard-won gains. It would exacerbate foreign exchange pressures, weaken domestic refining investments, and heighten the economy’s vulnerability to external shocks,” the CPPE stated.

Industrialisation

On industrial development, the body argued that imports are not a sustainable solution to supply constraints, insisting that Sustainable economic transformation is anchored on production, value addition, and industrial capability.

It warned that import-driven policies could accelerate de-industrialisation and weaken job creation in an economy with a growing labour force.

The CPPE also highlighted structural challenges facing local producers, noting that the idea of competition with imports is flawed.

It explained that domestic firms contend with poor logistics and transport infrastructure, high energy costs, elevated financing costs (with lending rates often exceeding 25–30 per cent), and multiple taxation, fees, and regulatory burdens.

“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,” the statement said, citing high energy costs, poor infrastructure, and expensive financing as major constraints.

The CPPE also raised concerns about the sub-quality of imported petroleum products and exposure to substandard products, with implications for consumer protection, environmental standards, and the sustainability of local refining investments.

It argued that any 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.

“Sustainable competition should be fostered within a strengthened domestic industrial ecosystem, not through exposure to import pressures,” it said.

Energy security

On energy security, the group warned against a return to import dependence, noting that Nigeria’s past reliance on fuel imports led to the collapse of domestic refining capacity and significant foreign exchange burdens.

The group added that energy import dependence imposed an annual import burden estimated at $10–15 billion on the Nigerian economy.

It stated that recent progress, particularly with the operationalisation of the Dangote Refinery, shows the country can achieve self-sufficiency with the right policies.

“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, imposed an annual import burden estimated at $10–15 billion at its peak, and exposed the economy to severe foreign exchange and fiscal pressures.

“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.

“Nigeria needs expansion of domestic refining capacity, not more import licences for petroleum products,” the statement explained.

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Food imports

The CPPE cautioned that increased food imports could harm agriculture by depressing farmgate prices, discouraging investment, and undermining rural livelihoods.

It maintained that Nigeria’s food security strategy should prioritise boosting domestic productivity and strengthening value chains.

The group further warned that heavy reliance on imports poses macroeconomic risks, including pressure on the naira, depletion of external reserves, and increased exposure to global shocks.

The CPPE noted that many advanced economies are now shifting towards strategic protectionism to strengthen domestic industries, making it “paradoxical” for developing countries like Nigeria to be encouraged to liberalise imports.

The body urged the World Bank to focus on policies that promote industrialisation, including expanding refining capacity, reducing production costs, strengthening manufacturing ecosystems, and improving agricultural productivity.

“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,” the CPPE said.

The body further called on policymakers to reject import-dependent strategies and prioritise reforms that build a resilient, self-reliant, and industrialised economy.