MAN faults World Bank’s petrol import recommendation, warns

Nigeria's industrial heartland is in open conflict with the World Bank over energy policy, and European investors need to pay attention. The Manufacturers Association of Nigeria (MAN) has publicly rejected the World Bank's recommendation to reinstate petrol import licences, arguing that reintroducing competition in fuel imports would devastate domestic manufacturing capacity and trigger broader economic contraction.

The dispute centres on a fundamental question: should Nigeria's government relax control over petroleum product imports to increase fuel availability and stabilise prices, or should it protect nascent domestic refining capacity and manufacturing competitiveness? The World Bank's position reflects orthodox thinking—liberalisation reduces bottlenecks and encourages price competition. MAN's counter-argument is more nuanced: Nigeria's refineries remain fragile, and allowing unrestricted imports would undercut local producers before they achieve scale, creating long-term structural weakness.

**Context: Nigeria's Energy Crisis and Industrial Vulnerability**

Nigeria has faced chronic fuel scarcity despite being Africa's largest oil producer. Domestic refining capacity has been severely constrained for years, forcing the country to import refined products at enormous fiscal cost. The government has intermittently subsidised imports, creating budget pressure. The World Bank's recommendation to open import licences again stems from this reality—more sources of supply could theoretically stabilise shortages.

However, MAN's Director-General Segun Ajayi-Kadir frames this differently. Nigeria invested heavily in refinery rehabilitation under former President Buhari, with the Dangote Refinery (Africa's largest, 650,000 barrels per day capacity) coming online in 2023. Reintroducing widespread import licences would immediately disadvantage these new facilities by flooding the market with cheaper imports, potentially crippling their commercial viability before they achieve operational leverage.

**Market Implications for European Investors**

This matters significantly for European manufacturers and investors with operations in Nigeria or supply chains dependent on Nigerian industrial output. If MAN's warnings prove prescient, a deindustrialisation scenario would mean:

- **Rising input costs** for European firms relying on Nigerian manufacturing partners, as energy becomes unreliable or expensive
- **Reduced market opportunities** in Nigerian manufacturing and agro-processing sectors
- **Currency pressure** on the Naira if industrial competitiveness erodes and import dependency deepens
- **Policy uncertainty** signalling weak institutional coherence between international bodies and domestic stakeholders

Conversely, if the World Bank's logic prevails and imports increase, fuel prices may stabilise short-term but at the cost of medium-term industrial capacity. European investors in Nigeria's energy-intensive sectors (cement, chemicals, food processing, textiles) face a scenario where either policy outcome creates headwinds—either energy instability or industrial contraction.

**What This Reveals About Nigeria's Policy Environment**

The dispute also signals fractured institutional alignment. When the World Bank (a primary creditor and policy advisor) recommends one path, and Nigeria's industrial federation openly rejects it, foreign investors should recognise that policy direction remains contested. This is not necessarily negative, but it demands scenario planning.

The most likely outcome is a compromise: selective import liberalisation (perhaps via auction-based licences) that allows some competition without flooding the market. This would preserve Dangote's viability while easing supply bottlenecks. Such a middle path would benefit European investors most, offering both price stability and domestic industrial resilience.

Watch this space closely. MAN's public stance suggests the government is genuinely listening to industrial voices, which is encouraging. But until a final policy emerges, European investors should assume energy pricing volatility in Nigeria will persist.

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