WorldStage– The Centre for the Promotion of Private Enterprise (CPPE) said the recent Federal Government policy on Fiscal Policy Measures and Tariffs Amendment aligns with Nigeria’s industrialization effort, but the policy approach to petroleum product import calls for concern.
While the policy reveals deliberate efforts to stimulate investment in domestic production across sectors, including agriculture, manufacturing, and energy, its accommodation of increased petroleum product import might disrupt the nation’s move towards energy self-sufficiency.
WorldStage earlier reported the World Bank recently advised Nigeria to further liberalized licensing for petroleum import—to promote competitive pricing, and forestall monopoly by local refiners, especially Dangote Petroleum Refinery.
Analysts and local producers protested, and warned the federal government against heeding the advice to detour Nigeria on its journey to energy sufficiency and net petroleum exportation which the local refiners champion.
Given the scale of the refiners’ investments, stronger fiscal protection, the CPPE said, will help in consolidating efforts to achieve energy self-sufficiency, attract more private investments in refining, and stabilize foreign exchange.
“Currently, domestic refineries operate with virtually no tariff protection—an evident policy gap when compared to other segments of the industrial sector.”
Some of the policy measures CPPE also identified include the Import Adjustment Task for 192 tariffs, selective import restrictions, tariffs reduction on industrial inputs, excise duty adjustment and green taxes on selected imported vehicles.
There is also a national list of 127 items. These intermediate goods and industrial inputs attract concessional tariffs of 0–10%, to stimulate competitiveness, according to the centre.
A major thrust of the policy is the increase in tariffs (from 20 percent to 70 percent) on imported finished food, plastics, textiles, and metal products.
“Given Nigeria’s continued reliance on imports across several consumption categories, this policy has the potential to materially reshape market dynamics,” the centres said in its April 20 response to the policy.
And viewed from an investor perspective, the framework, the centre noted, presents a mix of significant opportunities and risks, depending on sector positioning and business models.
It saw benefits for investors who can spot the opportunity in manufacturing and import substitution, and take the plunge into agro-processing, light manufacturing, packaging, and basic metals.
“The National List (127 items at 0–10%) provides a significant cost advantage for producers and aligns with global industrial policy best practices, where input cost competitiveness is critical for export readiness,” the centre said.
While most of the policy benefits domestic production, it equally puts pressure on import-dependent business, considering the impact of the tariffs increase.
The CPPE said the likely consequences include losses of sales and profits, and a necessity to forge a new business model.
It recommended further reduction in imported vehicles tariffs to ease transportation cost for the lower class, and ownership access for the middle class.
“CPPE recommends reducing import duty on mass transit buses to 5% and granting a full VAT waiver,” the centre said. “This would incentivise private sector investment in mass transit, encourage employers and public institutions to provide staff transportation, and stimulate government investment in public mobility.” It also advocated Semi Knocked Down (SKD) parts attract a tariff of not more than 5%, while Completely Knocked Down (CKD) parts should be zero-rated.
