CPPE: Dangote Refinery, local investors need protection, not import exposure

THE Centre for the Promotion of Private Enterprise (CPPE) has cautioned against growing calls for unrestricted importation of petroleum products, warning that such a policy direction could undermine Nigeria’s industrialisation drive and weaken domestic refining investments.

In a statement issued on Sunday, Chief Executive Officer of the CPPE, Dr Muda Yusuf, said Nigeria must avoid policies that encourage excessive import dependence at the expense of local production and refining capacity.

According to the CPPE, the debate over petroleum imports goes beyond fuel supply and touches on the broader question of Nigeria’s economic philosophy, industrial future and economic sovereignty.

The organisation argued that no country has achieved industrial prosperity through heavy dependence on imports, stressing that sustainable economic growth is built on domestic production, manufacturing, refining and value addition.

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The CPPE noted that Nigeria’s long-standing dependence on imported petroleum products had previously created major economic distortions, including pressure on foreign reserves, weakening of the naira, fiscal leakages, subsidy-related corruption and the collapse of domestic refining capacity.

It added that the country once spent over $10 billion annually on petroleum product imports while trillions of naira were also expended on fuel subsidies during the subsidy regime.

According to the economic policy group, the consequences included persistent exchange rate pressures, widening trade deficits, weak industrial competitiveness, investor uncertainty and macroeconomic fragility.

The CPPE said recreating conditions that previously pushed Nigeria’s foreign exchange (FX) market close to systemic distress would be economically dangerous.

The organisation maintained that countries across the world, including the United States, China, India and several European nations, continue to protect strategic sectors through industrial policies, tariffs and domestic manufacturing incentives.

It described self-reliance not as economic isolationism but as a pragmatic strategy aimed at strengthening domestic productive capacity and reducing vulnerability to external shocks.

The CPPE also argued that Nigeria’s domestic refining industry deserves strategic policy support, especially following the establishment of the Dangote Refinery and growing investments in modular refineries.

It warned that unrestricted fuel importation could discourage future industrial investments and send negative signals to both local and foreign investors.

“What message are we sending to investors if a multi-billion-dollar refinery investment of continental significance is confronted with regulatory uncertainty and policy headwinds?” the statement asked.

The organisation further rejected claims portraying Dangote Refinery as a monopolistic threat, saying the refinery merely undertook a large-scale investment that others were free to pursue.

According to the CPPE, scale should not be criminalised because large industrial investments help lower production costs, deepen value chains and strengthen economic resilience.

The group argued that local manufacturers already face multiple structural disadvantages, including high energy costs, poor infrastructure, multiple taxation, high interest rates, logistics bottlenecks, FX volatility and regulatory burdens.

It said exposing local producers to unrestricted competition from imports under such conditions would amount to institutionalising structural disadvantage against domestic industries.

The CPPE recalled that indiscriminate import liberalisation had previously contributed to the collapse of several Nigerian industries, including tyre manufacturers such as Dunlop and Michelin, as well as textile mills, automobile assembly plants and pharmaceutical firms.

It also warned that the implementation of the African Continental Free Trade Area (AfCFTA) could become disruptive if urgent steps are not taken to strengthen Nigeria’s productive capacity and industrial competitiveness.

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The organisation further stated that every imported petroleum cargo represents exported jobs, pressure on foreign reserves and weakening local value chains, while domestic refining supports energy security, foreign exchange conservation, job creation and macroeconomic stability.

Drawing parallels with Nigeria’s recent food importation experience, the CPPE said large-scale food imports disrupted local agricultural value chains and weakened incentives for domestic farmers, despite temporarily easing food prices.

The group therefore urged the Nigerian government to maintain policy consistency in support of domestic production, refining and industrialisation.

According to the CPPE, Nigeria must decide whether it wants to build a production-driven economy or remain trapped in a consumption-based economic structure dependent on imports.