CPPE WARNS AGAINST WORLD BANK ADVOCACY FOR INCREASED FUEL AND FOOD IMPORTS
Introduction
The Centre for the Promotion of Private Enterprise (CPPE) expresses strong reservations about the policy proposition by the World Bank in its recent Nigerian Development Update, advocating increased importation of petroleum products and food as a solution to Nigeria’s supply-side constraints.
This recommendation is deeply troubling and fundamentally misaligned with Nigeria’s current economic realities and reform trajectory. At a time when the country is making measurable progress in restoring macroeconomic stability—evidenced by improving foreign reserves, moderating inflation, a more stable exchange rate regime, and growing capacity for the export of refined petroleum products—the policy priority should be to consolidate these gains, not undermine them.
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.
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—particularly in a global environment characterized by geopolitical tensions and energy market volatility.
The emphasis, therefore, should be on expanding and stabilizing 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.
Industrialisation Must Be the Priority
Sustainable economic transformation is anchored on production, value addition, and industrial capability—not import dependence. The suggestion that supply-side constraints can 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:
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.
Structural Constraints and the Illusion of Competition
The assumption that trade liberalisation enhances competition fails to reflect the structural realities facing Nigerian producers.
Domestic firms contend with:
In this context, the notion of “competition” between imports and domestic production is both misleading and inequitable. What is being presented as market competition is, in reality, a structural asymmetry that places domestic producers at a significant disadvantage. Nigerian refiners and other manufacturers operate in a high-cost environment—characterised by elevated energy costs, logistics bottlenecks, infrastructure deficits, high interest rates, and policy uncertainties—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.
Beyond the issue of structural imbalance, there are also legitimate concerns around the quality of imported petroleum products and the risk of dumping. 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.
Sustainable competition should be fostered within a strengthened domestic industrial ecosystem, not through exposure to import pressures.
Energy Security: A Strategic Imperative
The risks of import dependence are most evident in the energy sector. Nigeria’s historical reliance on imported petroleum products:
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.
The ongoing geopolitical tensions in the Middle East have further underscored the dangers of energy dependence. Global supply disruptions are quickly transmitted into domestic price shocks, amplifying inflationary pressures and eroding business margins.
The desired policy direction is therefore unambiguous: Nigeria needs expansion of domestic refining capacity—not more import licences for petroleum products.
Encouraging importation at this stage would undermine investor confidence in local refining, weaken backward integration, and reverse progress towards energy security.
Food Imports and Agricultural Disincentives
The case against excessive food importation is equally compelling. Import surges:
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.
Macroeconomic and External Sector Risks
Heavy import dependence carries significant macroeconomic consequences:
These risks are incompatible with the objectives of macroeconomic stability, economic resilience, and national economic sovereignty.
Global Shift Towards Strategic Protection
Across advanced economies, there is a clear shift away from unrestrained trade liberalisation towards strategic protectionism. Governments are increasingly prioritising:
It is therefore paradoxical—and indeed worrying—that the World Bank is urging developing economies such as Nigeria to embrace policy prescriptions that many advanced economies are increasingly retreating from. Across the developed world, there is a clear resurgence of strategic protectionism and supply chain reconfiguration—driven by lessons from recent global disruptions, including the pandemic and ongoing geopolitical tensions.
Major economies are prioritising domestic production, safeguarding critical industries, and deploying subsidies, tariffs, and localisation policies to strengthen economic resilience and national security. In contrast, recommending import liberalisation for countries still grappling with structural deficits and industrial fragility risks entrenching dependence, undermining local capacity, and stalling the industrialisation process.
What the World Bank Should Be Promoting
The World Bank should recalibrate its policy advisory towards industrialisation-driven reforms, rather than import expansion.
Priority policy recommendations should include:
These are the policy pathways that will deliver sustainable growth, job creation, and economic resilience.
Conclusion
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:
The CPPE therefore urges policymakers to reject import-dependent strategies and prioritise reforms that build a resilient, self-reliant, and industrialised Nigerian economy.
DR MUDA YUSUF
CHIEF EXECUTIVE OFFICER
CENTRE FOR THE PROMOTION OF PRIVATE ENTERPRISE [CPPE]
12TH APRIL 2026
