Lagos: Nigeria’s 2026 tariff policy presents both a significant risk and opportunity for economic growth, and one of the country’s most influential business think-tanks is urging the government to take decisive action to ensure it fosters, rather than hinders, development.
The Centre for the Promotion of Private Enterprise (CPPE) warns the Federal Government that failing to urgently protect local refineries, reduce duties on used cars, and make solar energy affordable could undermine the intended economic growth of the fiscal framework.
CPPE Chief Executive Officer, Dr Muda Yusuf, made the call in a statement issued on Sunday in Lagos, in response to the 2026 Fiscal Policy Measures and Tariff Amendments.
The framework signals a strategic shift towards domestic production, deeper industrialisation, and reduced import dependence.
Measures include revisions to Import Adjustment Tax across 192 tariff lines, selective import restrictions, lower tariffs on inputs, excise adjustments, and green taxes on imported vehicles.
Yusuf said the framework presents both sector opportunities and associated risks.
He highlighted higher tariffs on imported finished goods, including food, plastics, textiles and metals, with combined levies ranging from 20 to 70 per cent.
“This measure raises import costs and strengthens domestic producers’ competitiveness.
He added that reliance on imports could reshape market dynamics.
He noted that sectors such as agro-processing, light manufacturing, packaging, and metals could benefit from improved capacity utilisation, driven by increased tariffs on finished imports and the resulting competitive advantage for local producers.
However, he warned that import-dependent firms face adjustment challenges under the policy.
According to him, higher tariffs will raise costs for traders, compress margins and reduce sales volumes.
Yusuf expressed concern over the policy’s relatively soft fiscal stance on petroleum product imports, recommending greater fiscal protection specifically for the domestic refining sector.
He said fiscal protection was needed to consolidate domestic refining gains and attract investment.
He highlighted the lack of tariff protection for local refineries compared with other industries.
He reiterated that protective tariffs are critical for securing investment and energy stability for locally refined products.
Yusuf urged a review of the 40 per cent tariff on used vehicles with an engine capacity below 2000cc. He said additional charges pushed rates above 50 per cent, making them excessive for a road-dependent economy.
He warned that these tariffs restrict vehicle access and reduce jobs in e-hailing and car hire.
He recommended reducing tariffs on such vehicles to a maximum of 25 per cent, inclusive of all charges.
In the automotive sector, Yusuf called for a more supportive tariff regime, recommending that the automotive assembly sector receive targeted tariff reductions.
He proposed tariffs of not more than 5 per cent on semi-knocked-down parts for automotive assembly, and zero duty on Completely Knocked Down parts used by local assemblers.
He also urged that mass transit bus imports—specifically for the transport sector—should be subject to a 5% duty, along with a full VAT waiver.
Yusuf said this would incentivise private investment and encourage organisations to provide staff transport. “It will also stimulate public mobility investment and ease high transport costs on citizens,” he said.
He advocated lower tariffs on renewable energy equipment such as solar batteries and inverters to boost affordability and sector growth. Yusuf recommended reducing the import duty on solar energy equipment to 5 per cent and granting full VAT waivers for the renewable energy sector.
Yusuf noted that costs remain prohibitive for many households and small businesses, explaining that this would offer alternatives to unreliable power and increase productivity.
Yusuf emphasised that without well-targeted tariff reforms, Nigeria risks missing its goals for restructuring, industrialisation, and economic resilience. He stressed that relevant reforms are crucial to driving sustained growth.
He reiterated that while the new tariff measures create significant investment opportunities in manufacturing and green sectors, careful reforms are still needed to safeguard import-dependent industries and ensure sustainable economic progress.
