CPPE Faults World Bank’s Fuel Import Push, Warns of Risks to Nigeria’s Economy
In a statement released on Monday, CPPE’s Chief Executive Officer, Muda Yusuf, said the proposal—outlined in the bank’s recent Nigeria Development Update—was concerning and could derail progress made toward macroeconomic stability.
The report, which has since been withdrawn, had suggested issuing more fuel import licences to address rising prices and curb inflation. However, the recommendation has sparked widespread criticism among stakeholders.
Yusuf noted that Nigeria is beginning to see improvements in key economic indicators, including foreign reserves, inflation trends and stability in the foreign exchange market. He stressed that policy direction should focus on strengthening these gains rather than reversing them.
He argued that the country is gradually advancing towards self-sufficiency in petroleum products, largely driven by private investments in local refining capacity. According to him, encouraging imports at this stage could undermine these efforts.
Increasing fuel imports, he warned, would intensify pressure on foreign exchange, discourage investment in domestic refining and expose the economy to external shocks.
Yusuf further emphasised that long-term economic growth must be built on local production and industrial expansion, not reliance on imports. He maintained that using imports to address supply shortages contradicts Nigeria’s broader development goals.
He also highlighted structural challenges confronting local producers, including poor infrastructure, high energy costs, expensive financing and multiple taxation. These conditions, he said, create an uneven playing field between domestic producers and foreign competitors.
According to Yusuf, what is often described as competition between imports and local production is, in reality, a structural imbalance, as foreign producers typically benefit from subsidies, better infrastructure and lower financing costs.
On energy security, he recalled that Nigeria’s previous dependence on imported fuel contributed to the collapse of local refineries, fostered a rent-seeking import system and imposed an annual import bill estimated at between $10 billion and $15 billion at its peak.
He pointed to recent developments in domestic refining—particularly the operations of the Dangote Refinery—as evidence that Nigeria can achieve self-sufficiency with the right policy support.
Yusuf insisted that the country’s priority should be expanding local refining capacity rather than issuing additional import licences for petroleum products.
He also cautioned against increased food imports, warning that they could reduce farmgate prices, discourage agricultural investment and weaken rural livelihoods.
Heavy reliance on imports, he added, could worsen macroeconomic conditions by increasing demand for foreign exchange, putting pressure on the naira, depleting reserves and exposing the economy to global shocks.
The CPPE boss urged the World Bank to align its policy recommendations with Nigeria’s development priorities by promoting industrialisation-focused reforms. These include lowering production costs, strengthening manufacturing, expanding refining capacity and improving agricultural value chains.
He concluded that import liberalisation is not a sustainable solution to Nigeria’s supply challenges, warning that it could deepen structural weaknesses and accelerate de-industrialisation.
Yusuf called on policymakers to prioritise strategies that boost domestic production, enhance industrial capacity and promote a self-reliant economy, anchored on strong refining, manufacturing and agricultural systems.
