CPPE Warns Against Increased Fuel and Food Imports Recommended by World Bank
The Center for the Promotion of Private Enterprise (CPPE) has raised concerns regarding a recommendation from the World Bank to boost fuel and food imports, asserting that such policies could jeopardize Nigeria’s economic stability and hinder industrial growth.
In a statement released on Sunday, CPPE Chief Executive Officer Muda Yusuf described the World Bank’s Nigeria Development Update recommendations as “deeply disturbing and fundamentally out of sync” with the country’s current economic landscape and ongoing reforms.
The CPPE emphasized that efforts should prioritize bolstering domestic production rather than increasing reliance on imports. Recent improvements in Nigeria’s foreign exchange reserves, inflation rates, and exchange rate stability support this approach.
The organization urged that Nigeria’s ongoing progress toward self-sufficiency in petroleum products must not be compromised by a surge in fuel and food imports. It also underscored the importance of expanding domestic refining capacity, ensuring stable crude oil supplies to local refineries, and fostering investments in the downstream sector.
The report highlighted that Nigeria is making strides toward greater self-sufficiency in supplying petroleum products, primarily driven by significant private investment in domestic refining capabilities. “This momentum should be supported with policies that enhance local production, increase value addition, and reinforce industrial linkages throughout the economy,” CPPE stated.
Challenges of Import-Driven Policies on Industrialization
In addressing industrial development, the CPPE contended that imports are not a viable long-term solution to supply issues. The organization remarked that sustainable economic transformation relies heavily on local production, value addition, and the development of industrial capacity.
It further cautioned that import-driven policies could lead to accelerated deindustrialization, hindering job creation in an economy characterized by a growing workforce. CPPE also called attention to the flawed notion of competition stemming from imports, citing numerous structural challenges faced by local producers.
Domestic enterprises are grappling with a myriad of obstacles, including inadequate logistics and transportation infrastructure, high energy costs, soaring financing costs (with loan interest rates often exceeding 25-30%), and burdensome taxation and regulatory frameworks. “This creates an uneven playing field, pitting domestically constrained local investors against globally competitive firms with systemic advantages,” the statement noted.
Concerns over Energy Security and Import Dependence
On the energy security front, CPPE cautioned against a return to import dependence, referencing Nigeria’s historical reliance on fuel imports that led to the decline in domestic refining capacity and significant foreign exchange constraints. The organization highlighted that energy import reliance places an estimated annual burden of $10 billion to $15 billion on the Nigerian economy.
The report pointed to recent developments, particularly the operationalization of the Dangote refinery, as evidence that Nigeria can achieve self-sufficiency with appropriate policies in place. The statement stressed, “Nigeria requires enhanced domestic refining capacity, not additional import permits.”
Implications of Increased Food Imports
Regarding food imports, CPPE warned that a surge could harm agriculture by depressing farm prices, discouraging investment, and destabilizing rural livelihoods. The report advocated for a food security strategy that emphasizes enhancing domestic productivity and strengthening agricultural value chains.
The group also noted that an over-reliance on imports poses macroeconomic risks, such as pressure on the naira, depletion of foreign exchange reserves, and increased vulnerability to global shocks. It stated that it is contradictory for a developing nation like Nigeria to be encouraged to liberalize its imports when many developed countries are reverting to protectionist strategies to bolster their domestic industries.
In light of these challenges, CPPE called on the World Bank to prioritize policies that foster industrialization, including expanding refining capacity, lowering production costs, bolstering manufacturing ecosystems, and elevating agricultural productivity. The organization reiterated that import liberalization is not a sustainable remedy for Nigeria’s supply-side challenges; instead, it poses risks that could deepen structural vulnerabilities and subject the economy to greater external shocks.
