Economist Warns Against Return To Fuel Imports, Says Nigeria Lost $10bn Yearly

By BUKOLA ARO-LAMBO AND OLUSHOLA BELLO, Lagos

The Centre for the Promotion of Private Enterprise (CPPE) has warned against growing calls for unrestricted importation of petroleum products, cautioning that such a policy could undermine Nigeria’s industrialisation drive, weaken domestic refining investments and expose the economy to renewed foreign exchange pressures.

In a position statement titled, ‘Import Liberalisation and the Risks of Deindustrialisation in Nigeria,” the director/CEO of CPPE, Dr Muda Yusuf urged that the ongoing discussion reflects broader economic philosophies critical for Nigeria’s industrialisation and economic sustainability, insisting that Nigeria should consolidate domestic refining capacity to safeguard industrialisation and economic sovereignty.

He stated, “This conversation extends beyond petroleum products and touches upon the foundation of Nigeria’s economic structure, the future of our industrial base, and ultimately, the integrity of our economic sovereignty. History shows that no nation has achieved industrial success through excessive reliance on imports.”

According to Yusuf, prosperous economies thrive on production, refining, manufacturing, value addition, and the reinforcement of local capacity. Over-reliance on imports can lead to job loss, weakened industries, diminished local investments, and compromised economic sovereignty. Therefore, Nigeria should strive to maintain policies that support domestic production while fostering healthy competition.

Yusuf pointed out that decades of dependence on imported petroleum products have led to significant economic distortions, including pressure on foreign reserves, depreciation of the naira, the decline of domestic refineries, and challenges related to foreign exchange liquidity and corruption in the subsidy system.

He noted that the country spent trillions of naira annually subsidising imported fuel during the height of the subsidy era, transferring valuable resources and opportunities abroad.

He cautioned that excessive import dependence put Nigeria’s foreign exchange market at risk, a concern that was addressed by recent administrations’ reforms to restore stability and rebuild investor confidence.

“Recreating previous conditions that weakened our economy would be economically unwise,” he stated.

Yusuf highlighted the approaches taken by other nations, such as the United States, which uses tariffs and industrial subsidies to strengthen manufacturing, and countries like China, Europe, and India, which prioritise support for their domestic industries.

He noted, “Industrialisation thrives on smart policy interventions rather than extreme liberalisation. Countries do not grow by solely welcoming imported goods.”

Yusuf addressed concerns about Dangote Refinery, asserting that characterising it as a monopolistic threat is overly simplistic.

He emphasised that the refinery has not deterred other investors from the sector and that its establishment represents a monumental industrial investment, unmatched in Africa.

He further noted that Nigeria should embrace bold investments that reflect industrial courage and risk-taking. Undermining such transformative initiatives could send negative signals to both domestic and foreign investors.

Highlighting Nigeria’s experiences with food importation, Yusuf illustrated “the adverse effects that excessive liberalisation can have on local agricultural value chains, farmers’ incentives, and investment in domestic production.

“While imports may temporarily moderate prices, he stressed that meaningful industrialisation can only be achieved through dedicated and sustained support for local production.”