CPPE advocates for protectionism as panacea to Nigeria’s industrial growth

Nigeria’s pursuit for a healthy industrialisation is hinged on long-term economic growth, job creation, and national sovereignty, as history and global experience show that no country has achieved industrialization through indiscriminate trade liberalization, according to the Centre for the Promotion of Private Enterprise, (CPPE).

The recent 15% import duty on refined petroleum products approved by President Bola Tinubu, reportedly represents a positive policy proposition when complemented with broader industrial support measures as it can catalyze industrial expansion, conserve foreign exchange, create jobs, and promote economic resilience.

A policy brief issued by the Centre for the Promotion of Private Enterprise, CEO, Dr. Muda Yusuf advocates for strategic protectionism—a calibrated policy approach that safeguards domestic and emerging industries while building competitiveness and self-sufficiency.

Yusuf posited that Nigeria’s excessive dependence on imports over the past few decades has weakened its productive base, eroded competitiveness, and exposed the economy to external shocks, stressing that sectors that enjoyed measured protection—such as cement, flour, and beverages—have recorded remarkable domestic growth and value addition.

He highlighted that industrialization remains the cornerstone of sustainable economic transformation, employment generation, and national prosperity, citing the success stories of China, South Korea, India, and Malaysia, that built their industrial strength through inward-looking strategies during their formative decades.

“They protected infant industries, promoted local content, and developed domestic value chains before gradually opening up to global competition. Even the United States, the world’s largest economy, has recently adopted protectionist industrial policies to bolster its manufacturing base,” it stated.

It explained that for developing economies like Nigeria, historical evidence confirms that industrial take-off requires a measured degree of protectionism.

According to CPPE, “Nigeria’s prolonged dependence on imports has created deep structural distortions. The absence of effective protection and inadequate support for local producers have discouraged investment and led to decades of deindustrialization. The oil and gas sector epitomizes this failure: decades of refined product importation have drained foreign reserves, weakened fiscal stability, and eroded economic sovereignty.”

CPPE therefore advocates for a strategic protectionist framework, particularly in key industrial sectors, as the foundation for Nigeria’s industrialization drive.

For industrialization to thrive, it noted that there is a need for consolidating the domestic market, progressing through regional expansion, and culminating in global competitiveness, while strategic protectionism provides the enabling environment for this evolution.

It affirmed that by shielding emerging industries from premature exposure to unfair competition, strategic protectionism will encourage domestic investment, foster local value addition, and allows firms to achieve efficiency and scale before competing globally.

The Centre stressed that for Nigeria, this approach is not economic isolation or the creation of monopolies, rather, it is a self-strengthening strategy to ensure the domestic economy develops sufficient capacity to compete effectively on the global stage.

“The continuous importation of petroleum products over the past two decades has imposed immense costs on the Nigerian economy. The consequences include sustained pressure on foreign exchange reserves, fiscal instability, and the collapse of domestic refining. The 15% import duty on refined petroleum products—petrol and diesel—is therefore a welcome development and a progressive and corrective measure.

“This modest protection will provide the policy support needed for domestic refineries such as Dangote Refinery, NNPCL refineries, and emerging modular refineries to thrive, restore Nigeria’s refining capacity, and reduce foreign exchange exposure,” Dr. Yusuf stated.

He cited Nigeria’s industrial history which shows that sectors which includes Flour Milling, Agro-Processing and Pharmaceuticals received structured protection and have recorded transformative outcomes via fostering backward integration and domestic capacity expansion; stimulating local production and employment; promoting health sovereignty and encouraging local manufacturing respectively.

It affirmed that in this context, a 15% duty on refined petroleum products is modest, balanced, and necessary to restore Nigeria’s refining capacity and fiscal resilience.

Dr. Yusuf underscored that Nigerian manufacturers face high energy costs, weak infrastructure, limited access to finance, inefficient ports, and complex regulatory frameworks, while producers in advanced economies enjoy subsidized energy, efficient logistics, and low-interest financing. According to him, without correcting this imbalance, Nigerian firms cannot compete fairly, noting that genuine competition requires comparable production conditions, not a contest between subsidized imports and under-supported domestic producers.

The Centre argued that properly designed protectionist measures deliver broad developmental dividends that stimulate industrial growth and job creation; Conserve foreign exchange and stabilize the naira; Promote backward integration and local value addition; Enhance macroeconomic and fiscal resilience as well as encourage innovation, technology transfer, and long-term competitiveness.

Additionally, it noted that the long-term solution lies not in liberalizing imports but in improving domestic efficiency, as domestic industries scale up, production costs will decline, leading to price stabilization and consumer welfare gains.

The Centre advocated that “Nigeria should adopt a competition model that prioritizes domestic production over import dependence. Producers should compete with fellow producers, not with importers. Both indigenous and foreign investors should be encouraged to produce locally through clear, consistent, and performance-based policies.

“This approach—successfully applied in the cement, flour, and beverage industries—can be replicated across sectors to achieve self-sufficiency and export readiness within a decade.”

The Centre urged the government to sustain the policy and strengthen it with extensive measures to ensure it produces long-lasting results.

It recommended fiscal incentives, low-cost financing, reliable energy supply and improved infrastructure to help manufacturers cut expenditure and expand output, adding the need to:

“Sustain the 15% import duty on refined petroleum products to protect and incentivize investment in domestic refining.

“Complement tariff protection with industrial support policies, including low-cost financing, energy access, and improved logistics to prevent price escalation

“Expand backward integration incentives in petrochemicals, steel, agro-processing, and pharmaceuticals.

“Strengthen monitoring and evaluation to ensure protection fosters productivity, innovation and price moderation.

“Transition to export competitiveness once domestic industries attain stability, ensuring protection is performance-based and time-bound.”

Dr. Yusuf argued that Nigeria’s journey to sustainable industrialization must be anchored on strategic, time-bound protectionism, not indiscriminate liberalization, stressing that no country has industrialized through unrestrained exposure to imports.

“The 15% tariff on refined petroleum products is a forward-looking policy that can transform Nigeria’s industrial landscape if reinforced with complementary reforms.

“This is not merely about a single refinery—it is a sector-wide proposition that supports all current and future domestic investors in refining and related industries.

“Protectionism, when pragmatic and disciplined, is not about closing borders. It is about building domestic strength for global competitiveness. The goal is not to shut out the world, but to empower Nigeria to engage it from a position of strength,” Dr. Yusuf emphasized.