Nigeria slashes vehicle import tariffs to 40% to combat inflation
LAGOS — The Federal Government of Nigeria has slashed the total effective tariff on imported passenger vehicles from 70% to 40%, marking a major shift in Nigeria’s trade policy aimed at easing the high cost of living and stimulating economic growth. The reduction is a central feature of the 2026 Fiscal Policy Measures (FPM), signed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun. The policy, which officially took effect in April, replaces the 2023 fiscal guidelines and reverses high-tariff regimes dating back to 2015. Under the new framework, the combined burden of import duties and levies on fully built passenger motor vehicles, four-wheel drives, and station wagons has been reduced by 30 percentage points. Previously, importers faced a cumulative 70% charge, comprising 35% duty and 35% levy, which has now been consolidated into a 40% effective rate. Beyond standard vehicles, the government has introduced zero import duties for electric vehicles (EVs) and mass transit buses, as well as for agricultural and manufacturing machinery, to lower production costs for local industries. The 2026 FPM includes a “National List” of 127 items with reduced duties to protect essential sectors. Notable adjustments include bulk rice tariffs dropping from 70% to 47.5%, while broken rice fell to 30%. Essential food items like crude palm oil were cut to 28.75%, and raw cane sugar now ranges between 55% and 57.5%. These measures are intended to provide immediate relief to consumers by lowering the cost of imported staples and industrial inputs. To ensure a smooth transition, the Ministry of Finance has granted a 90-day grace period for importers who opened “Form M” before April 1, allowing them to clear goods under the old rates if advantageous. However, the government is also pivoting toward environmental sustainability. A new Green Tax surcharge and revised excise duty regime are scheduled to commence on July 1, 2026. While this tax aims to discourage the use of older, high-emission engines, vehicles under 2000cc and EVs are currently exempted from the surcharge to encourage cleaner transportation. Government officials state these measures are designed to promote and stimulate growth in critical sectors while buffering the economy against global volatility. While vehicle dealers have welcomed the move, many note that the final market price for cars will remain sensitive to the volatility of the Naira and port clearing costs. The policy reflects a broader strategy to balance revenue generation with the need to alleviate inflationary pressures on Nigerian households. Item Old Rate New Rate Passenger Vehicles 70% 40% Bulk Rice (>5kg) 70% 47.5% Broken Rice 70% 30% Agricultural Machinery 5% 0% Crude Palm Oil 35% 28.75% Steel Sheets/Coils 45% 35%
Nigeria exports maiden 950,000-barrel cargo of new Cawthorne crude
LAGOS — Nigeria National Petroleum Company Limited (NNPCL) has commenced exports of a new crude grade called Cawthorne, the company said on Wednesday, as Nigeria moves to ramp up flagging production and claw back market share in the global energy basin. The introduction of the Cawthorne Channel Light stream marks the second major export grade launched by Africa’s largest producer in six months, following the debut of the Nembe grade in late 2025. The new grade, sourced from the eastern Niger Delta, is a sweet, light crude with specifications similar to Nigeria’s flagship Bonny Light. It is expected to be a primary feedstock for refiners in Europe and Asia seeking low-sulfur gasoline and jet fuel components. Output of the new grade is estimated at between 50,000 and 70,000 barrels per day (bpd), according to traders and preliminary loading schedules. “This is a significant milestone in the Company’s drive to increase Nigeria’s crude oil production and expand its portfolio of globally competitive export streams,” NNPC said in a statement. The launch comes at a critical time for the Nigerian economy. The government is under pressure to boost foreign exchange liquidity and meet its 2026 budget targets, which are heavily dependent on oil revenues and a steady production floor. Nigeria has struggled for years to meet its OPEC+ production quotas due to aging infrastructure, large-scale theft, and a lack of investment in new deepwater projects. Market analysts say the addition of Cawthorne, alongside the Nembe stream, signals a more aggressive push by NNPC Ltd and the Nigeria Upstream Regulatory Commission (NUPRC) to offset declines in older fields and provide a buffer against localized supply disruptions. The first cargoes of Cawthorne have already been scheduled for loading this month, adding to the roughly 30 other grades Nigeria currently offers to the international market.
Nigeria’s crude Oil output hits 1.84mbpd as Finance Minister commends regulator
LAGOS — Nigeria’s daily crude oil production has climbed to 1.84 million barrels per day (mbpd), surpassing the federal government’s 2026 budget benchmark and signaling a significant recovery for the nation’s primary revenue source. The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, lauded the milestone during a meeting at the ministry’s headquarters on Thursday. Edun credited the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for its role in stabilizing the sector, noting that the increase aligns with the economic mandates set by President Bola Tinubu. The current output represents a sharp 40.5% rebound from the 1.31 mbpd recorded in February 2026, a period marred by technical disruptions and facility maintenance. “It is heartening that you can tell us that you are doing 1.84 million barrels per day. That is fantastic news,” Edun told NUPRC Chief Executive Mrs. Oritsemeyiwa Eyesan. While expressing satisfaction, the Minister urged the regulator to push toward a “magic figure” of 2 mbpd to further ease fiscal pressures and support the national debt profile. This production surge comes at a critical time for the Nigerian economy The 1.84 mbpd figure sits comfortably above the government’s conservative budget estimate of 1.8 mbpd. With Brent crude trading near $109 per barrel amid geopolitical tensions in the Middle East, sustained production at this level could significantly improve foreign exchange inflows. Crude oil remains the backbone of Nigeria’s economy, accounting for approximately 50% of total export earnings. Mrs. Eyesan attributed the growth to ongoing reforms under the Petroleum Industry Act (PIA), including the “drill or drop” provisions which encourage activity on dormant acreages. The Commission is currently finalizing the technical stages of the 2025 Licensing Round, which is expected to bring new indigenous and international players into the upstream sector to sustain the upward trajectory. Period Production (mbpd) Status January 2026 1.49 Base line February 2026 1.31 Technical deep April 2026 1.84 Target met Target 2.0+ Presidential mandate
Nigeria passes ₦68.30 trillion 2026 budget to drive infrastructure and economic reset
LAGOS — Nigeria’s National Assembly on Tuesday passed a record ₦68.30 trillion ($49.38 billion) budget for the 2026 fiscal year, significantly scaling up the government’s spending plans to combat inflation and infrastructure deficits. The approved “Budget of Consolidation” followed a last-minute request from President Bola Tinubu to adjust the initial ₦58.18 trillion proposal submitted in December, citing the need for increased investment in national priorities. A cornerstone of this year’s fiscal policy is the transition to a single, unified budget cycle. President Tinubu informed lawmakers that the government will officially close all capital liabilities from previous years by March 31, 2026 The move is designed to eliminate the historical practice of running multiple budgets concurrently, which officials say has long hampered transparency and project execution. The budget is anchored on a projected revenue of ₦34.33 trillion, leaving a deficit of approximately ₦33.97 trillion. The government plans to bridge this gap through a mix of domestic and external borrowings. Key benchmarks for the fiscal year include a crude oil price of $64.85 per barrel and an average exchange rate of ₦1,400 to the US Dollar. Security and infrastructure remain the primary focuses of the administration. Defence and Security received the largest share, totaling over ₦5.41 trillion, as the military seeks to modernize its equipment and stabilize volatile regions. Other major allocations include ₦3.56 trillion for infrastructure, ₦3.52 trillion for education, and ₦2.48 trillion for health. The administration is targeting a 4.68% GDP growth rate for 2026. The budget also assumes a continued decline in inflation, which the government aims to bring down to 14% by year-end. Lawmakers urged the executive to ensure strict implementation, emphasizing that the success of the budget depends on fiscal discipline and the timely release of funds to key sectors.
Nigeria targets 7% gowth and $14 billion infrastructure boost via IsDB partnership
LAGOS – Nigeria is pivoting toward private-led growth with a 7% medium-term GDP target, the Minister of Finance announced Monday in Lagos. Speaking at the Islamic Development Bank (IsDB) Group Day, the Minister outlined a realignment with the IsDB’s 2026-2028 framework to bridge a $14 billion annual infrastructure gap. The address, delivered for President Bola Ahmed Tinubu, signaled a transition from economic stabilization to investment-driven transformation. To hit these targets, the government aims to raise the investment-to-GDP ratio to 30%. This strategy requires a shift from public funding to private capital and innovative financing. The Minister highlighted Sukuk as a key tool for transparent, asset-backed infrastructure like roads. Nigeria plans to deepen ties with IsDB entities like the ICD and ITFC to securitize assets and expand capital markets. The partnership rests on two pillars: sustainable infrastructure and human capital. Infrastructure priorities include energy access, transport, and digital innovation. For human capital, 2026 is designated the “Year of Social Development,” aiming to bring 10 million Nigerians into the productive economy. Nigeria is also positioning itself as a leader in ethical finance. Through “Reverse Linkage” platforms, the country will share reforms in public financial management and digital agriculture with other member nations. “To achieve our medium-term target of 7% growth, Nigeria must raise its investment-to-GDP ratio to at least 30%.” The minister stated. The Minister concluded by calling for a move from dialogue to delivering bankable projects. He noted that the Renewed Hope Agenda and the IsDB roadmap will serve as the engine for job creation and measurable impact.
Nigeria: Otti commissions $35m beverage plant in Aba, pledges continued industrial support
Governor of Abia state Alex Otti has officially commissioned a new $35 million ultra-modern beverage production facility in Aba, marking a significant milestone in the state’s drive to reclaim its status as a premier industrial hub in West Africa. The facility, owned by Ultimum Beverages Limited—a subsidiary of the Kadji Group—is located within the Osisioma Industrial Layout. The plant currently produces the “Razzl” brand of carbonated soft drinks and represents an initial investment that is projected to scale to $100 million as the company expands its footprint in the region. Speaking at the commissioning ceremony on Wednesday, Governor Otti described the project as a “validation” of his administration’s efforts to improve the ease of doing business. He noted that the factory was established in just 10 months, attributing the speed of execution to the state’s focus on restoring critical infrastructure, including road networks and security within the industrial clusters. “This investment is a clear signal to the global business community that Abia is open for business,” Otti stated. “Our role as a government is to provide the enabling environment—the power, the roads, and the security—that allows capital to thrive and create jobs for our people.” The plant is expected to generate hundreds of direct jobs for Abia residents, ranging from technical engineering roles to administrative and distribution positions. Beyond direct employment, the facility is set to stimulate the local value chain, benefiting regional logistics providers and raw material suppliers. Mounir Elsarky, the CEO of Ultimum Beverages, commended the state government for its proactive support, noting that the choice of Aba was strategic due to its historical importance as a commercial nerve center and its proximity to key markets in the South-East and South-South regions. The commissioning follows a series of recent industrial milestones in the state, including the flag-off of the 140-hectare Aba Commercial Smart City and ongoing efforts to revitalize the Aba Mega Mall into a specialized manufacturing park for the garment and footwear sectors.
Monetary policy on point, but fiscal measures remain insufficient
A year after his appointment as the governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso has come the same conclusions as many of his predecessors – Nigeria’s successful monetary policy is dependent on appropriate fiscal policies, measures, and programmes. For instance, in his presentation after the monetary policy committee in September, the governor said: “Members (monetary policy committee) therefore reiterated the need to work in close collaboration with the fiscal authority to address the current upward pressure on energy prices. The MPC noted the continued growth in money supply, recognizing the need to curtail excess liquidity in the system as well address foreign exchange demand pressure. Members were also concerned about the growing level of fiscal deficit but acknowledge the commitment of the fiscal authority not to resort to monetary financing through ways and means. Furthermore, members observed a strong correlation between FAAC releases and liquidity levels in the banking system as well as its impact on exchange rate.” From this statement, it is not only clear that current macroeconomic stability measures of the Bank are hindered by fiscal policy measures but that there is a lingering mindset in the government at all levels that the solution to all problems is to spend. This mindset is also responsible for the poor choices made when it comes to expenditure. While energy prices are rising following the removal of subsidies, it been exacerbated on the back of the volatility and weakness of the exchange rate that arises from pressures from FAAC releases. Fig. 1. Changes in fuel prices showing dramatic changes since June 2023. As also shared above, the growth in money supply and excess liquidity in the financial system, exerting pressures on prices and exchange rate, also originates from fiscal expenditures. The governor also expressed concern over the growth in deficit financing of the budget. After his appointment in September 2023, Yemi Cardoso has set to do three major things – fight the twin elements of macroeconomic instability in exchange rates weakness and volatility, and inflation, strengthen the country’s financial system, and clean the rot in the apex bank in relation to lose monetary policy arising from development banking. By suspending all development banking measures, the governor has cut the over N10 trillion liquidity through credit subsidies, and strengthening the banking system through the ongoing new capital requirements. However, establishing macroeconomic stability remains a tough challenge. Notwithstanding, the Bank, under Cardoso’s leadership, has grown the country’s external reserves by nearly 20 percent since September 2023, with reserves up from the US $33 billion in 2023 to US $39 billion in September 2024. The macroeconomic instability challenge is also a common theme in the analysis provided by all monetary committee members in their statements released last week. It is on the basis of this that all members of the MPC voted to raise the monetary policy rate by 50 basis points from 26.5 percent to 27.25 percent except Philip Ikeazor, the deputy governor in charge of financial stability, according to the personal statements released by the Bank last week, To see the changes in the Nigeria’s debt dynamics since the Q1 2024, ThinkBusiness Africa checked the debt data releases on the debt management office (DMO) website. It observed that the latest data for Q2 2024 has not been released. It thus means that for this first in this decade, the subsequent quarter has elapsed without the releases of the latest debt data for the previous quarter. If this persists, doubts will begin to set in about whether the government is hiding the latest data of deficits and debts or seeking to manipulate the level of deficits and debts as done under President Muhammadu Buhari when the government hid the data on ways and means until the twilight days of his administration. Since June 2019, all debt data releases were done in the middle of the following quarter.
NELFUND should support Nigeria’s professional needs and not certificates for the sake of it
There is a sense that every measure of what constitute reforms under President Bola Ahmed Tinubu seeks to deal with the metrics rather than the conditions. For instance, there have been two sets of broad changes made under his presidency. The first set is the market based economic changes of the removal of fuel subsidies during his inauguration speech and the liberalisation of the foreign exchange market two weeks after. Those two changes focused on the prices rather than the market conditions that drive the underlying prices. Rather than seek to understand and change the market conditions that deliver the unacceptable prices, the President had proceeded to change the prices and expected the market conditions to align. Of course, that did not happen. The other set of “reforms” is the different categories of financial support provided to different groups of people on the back of worsening economic crisis under his leadership. We now have a deepening and broadening of the social support programmes first introduced under President Muhammadu Buhari. In this case also, rather than focus on the underlying challenges around production and productivity, the president has focused on providing different forms of cash transfers which invariably chases the same amount of goods in the economy. However, there is something entirely new about the student loans support. The Nigeria Education Loan Fund (NELFUND) established last year with an initial N5 billion is a great initiative but requires reforms. The loan is expected to provide increasing access to higher education to those that cannot afford it. With a monthly allowance of N20k and payment of relevant tuition fees, it is expected that 1.2 million students will benefit in the first phase. So far, an estimated near 300,000 students have already applied. But access to higher education has never been a serious problem. Access to quality and relevant higher education is the national problem we face. As it is, the loans are used by any student that needs it, but this does not necessarily means that it is used by the student that really needs it. Since the loans are not means tested, it is not necessarily the most indigent that gets it. So, rather than focus on expanding access to just any course in any higher institution in the country, the resources should be used to support the professional needs of the country. Rather than focus on the financial handicaps of students, the loans are better off supporting the growth and expansion of the professional areas most needed by the country – medical, biological, and technological sciences. These are areas where Nigeria can most benefit in the medium and long ter, using the loans as incentives. It is time for Nigeria to move beyond elements of socialism and the democratisation of poverty. The scarce resources available for scholarships should be used to solve Nigeria’s problems and not for personal egos. Spending four years doing courses and attending universities classes that do not add anything serious to knowledge and skills should not be our priority but how to fill the enormous gaps in the fields of medicine, pharmacy, technology, labs science, electrical, civil, and other forms of engineering fields. These are those that require incentives to study those courses. Indeed, because of the length of some of these courses, the relative higher costs of studying them, and the perceived faint interests by the government in these areas, many intelligent and brilliant students avoid them. By also focusing on the excellence of students, irrespective of financial background, which the government is not able to judge in the applications anyway, the government will be providing incentives for excellence. In conclusion, Nigerians have always loved education. Though that has metamorphosed into the erroneous love for certificates, rather than knowledge. It has also led to the rapid increases in the number of universities without commensurate increase in knowledge and skills. A corollary of that is the many degrees in our universities that have no further implications than the certificates awarded. It is no wonder that the managing director of NELFUND, Akintunde Sawyerr believes the students should be further supported with job opportunities if they do not get one two years after their service year. NELFUND should not preoccupy itself with that. It should be about supporting the best students to be relevant to Nigeria’s economic growth and development. So, instead of providing across all kinds of courses in all kinds of higher institution, the fund should support Nigeria’s priorities and expected outcomes. I thank you.
How not to remove fuel subsidies …. The vicious cycle of foreign exchange liberalization on fuel prices
Since the President announced the removal of fuel subsidies on May 29th, 2023, it has been difficult to estimate the accurate subsidies been paid by the government. The government is only not transparent, it is also not clear what volume of petroleum products is imported into the country and how demand and smuggling across the border is changing in response to changes in prices. Fuel prices, demand, and the level of smuggling area also affected by changes in the exchange rates while lags in timing for payment and receipt of imported products also makes it difficult to estimate levels of subsidy. Finally, the government /NNPC has not been forthcoming about the dynamics of the volume of fuel imported since the announcement of the removal of fuel subsidies by the President. Though there are many variables, and these variables are shifting, ThinkBusiness analysis show that the most devastating effect on fuel prices have come from changes in the exchange rate. As argued in the piece [insert link] the floating of the Naira on June 14th have been done without understanding its implications on fuel prices. This means that the government did not think through the implications of another major policy so soon after removing fuel subsidy before going ahead. It shows a gross lack of understanding of how reforms are handled that President Tinubu and his team thought that the two policies could not be contradictory in the short term. Without the exchange rate volatility that followed exchange rate reform, the removal of fuel subsidy would have been a one shot increase in price. The exchange rate changes, therefore, contributed to the rise in fuel prices more than any other thing. In June 2023, crude oil prices averaged about US $71 per barrel, about the same price this week. Since June 2023, whereas crude oil prices have been largely flat as shown in fig. 1 Nigeria’s fuel prices has increased by over 500 percent, as shown in fig. 2. Fig. 1. Nigeria’s Crude oil prices, production, and OPEC Quota. The table below compares the price changes in fuel in six countries in the last seventeen months since fuel subsidy removal. Comparing the changes in prices rather than differences in absolute prices allows us to focus on what is driving the changes. Without any change in policy or taxation in these countries, all the other prices responded to changes in the price of crude oil and other internal industry conditions, but Nigeria largely responded to the changes in the value of the naira against the US dollar. Fig. 2. The Changes in fuel prices in six countries, including Nigeria The president and his team have tacitly agreed that the casual and non-preparedness of the removal of fuel subsidy has led to some chaos. What they have not admitted to is the scale of not only not considering the implications for prices of food and transport, but that the president thought that the market will sort itself and the policy was taken in isolation. Fig. 3. The Exchange rate of the Naira against the US dollar. Unlike in the past, it thus appears the government is determined to see through the removal of fuel subsidies. From all indications, the government is currently passing on to Nigerians all fuel price changes arising from all the price changes relating to exchange rates, crude oil, transports, and all other related costs. However, the complexity and uncertainty surrounding the removal of fuel subsidy and the resultant fuel prices changes can only be minimised through stable exchange rates. With stable exchange rate, fuel prices will now only be affected by changes in the market conditions of the industry and not how the exchange rate shift prices significantly. And the entrance of the products from Dangote refinery will not help. Though supply have increased from Dangote refineries and the government has allowed the payment of crude in Naira, it does not change the fact that crude oil and its by products are international commodities and that removal of subsidy automatically integrates the Nigerian market into a global supply and demand chain. In the context, the outlook for a stable fuel price is weak. The government has focused on the metric and not the conditions. The government has focused on prices rather than working on the market conditions that improves stability and predictability for Nigerian consumers. And this is the most fundamental flaw of the reforms the government has embarked on. Invariably, the government has moved from one price fixing to another. Instead of focusing on improving the market conditions that dictate the price of the fuel and that of the exchange rate, the government has focused on the prices themselves. By focusing on prices, it has now realised that the market conditions do not support the new price targets.
How not to remove fuel subsidies
17 months is a short time in a country’s history, but it can also be a long time. 17 months after the casual statement by President Bola Ahmed Tinubu during his inauguration, many Nigerians are in utter shock. They are shocked that fuel prices have moved from N185 per litre in May 2023 to between N1,100 and N1,300 across the country. That is a staggering 550 percent increase. Some have described it as their worst nightmare. Fig. 1. The dynamics of PMS and diesel prices since June 2017 Wale Edun, the Minister for Finance, and the coordinating minister for the economy said last week that the government no longer pays subsidies on fuel and the foreign exchange. Recently also, the Group Managing Director of the Nigeria National Petroleum Company (NNPC), Mele Kyari argued that the prices of fuel in Nigeria and across West Africa trade corridors needed to match to prevent smuggling from Nigeria, supposedly stressing the motivation for the removal of fuel subsidies in the country. It follows that those in government, whenever they speak, spill two narratives. They argue that the reforms were necessary and there is no alternative. They also argue that Nigerians needed to pay this price for a greater future. However, what is clear, both in government and in public, is that no one could have predicted the dramatic increases in the price of fuel in the last 17 months. The expectation was that the increase in the price of fuel will be a one-off. However, fuel prices have gone up four distinctive times and the expectation is that there will further increases. And the simple reason is not just because the subsidies were not removed in full in June 2023, but because of the volatility of the exchange rate in the period. Combined, there are three dimensions to the crisis that are often absent in most analysis. First, there is no clear path or destination in President Tinubu’s reforms. For many months now, the President and his team have been at pains to explain the rising costs of living as a necessary pain for future growth, as part of a downturn of the global economy, and a necessary adjustment for the future growth in the country. However, these statements are made without context and explanation of the future they see. No one in government has been able to explain how the removal of fuel subsidies and the liberalisation of the foreign exchange will lead to investments, growth, and jobs. The argument here is not that there are no paths, but that the government has not figured that out. Nearly 18 months after the reforms, the government has not provided a concrete path to investments, growth, and jobs. The reason the government has not been able to provide these paths is because it has become obvious that those in government assume that those announcements are the reforms themselves and that “ right pricing” is sufficient to improving market conditions. Second, the floating of the Naira on June 14th have been done without understanding its implications on fuel prices. The government, after supposedly removing fuel subsidies at the start of June last year did not think through the implications of another policy before going ahead. It shows a gross lack of understanding of reforms that President Tinubu and his team thought that the two policies could not be contradictory in the short term. Without the exchange rate volatility that followed exchange rate reform, the removal of fuel subsidy would have been a one shot increase in price. Finally, the hasty, casual, and pedestrian way the removal of fuel subsidy was done also meant the necessary conversation, consultation, and preparation for what replaces or what the resources could be used for was not done with State governments. The outcome is a disparate and incoherent expenditures of newfound windfalls in governments, especially State governments. Fig. 2. State governments have been the largest beneficiary of FAAC since the removal of fuel subsidies The outcome is now different from the many arguments that were constructed by many in favour of the removal of subsidies, including by ThinkBusiness Africa. The argument was that the removal of fuel subsidies will allow greater level of expenditure on education, health, and infrastructure. However, there is no evidence that these expenditure ratios on these items have been significantly more than when the fuel subsidy was in place. These situations persist. The government is not having a debate within itself about what can be done. The federal government is not having the debate or consultation with State governments about what can be done to improve market conditions and not spike the foreign exchange markets. And the government continues to believe the “right pricing” will bring about the investments, growth, and jobs. That same partial analysis has made the World Bank Chief Economist Indermit Gill suggests that it will take 15 years of continuous reforms for Nigeria to break the cycle of low growth. But Gill did not tell his hosts that this is not the way reforms are done.
