Oversight of 2026 Fiscal Policy Measures on Import Duties, Excise Taxes, and Industrial Protection

Abstract

The Federal Government has introduced a comprehensive set of fiscal policy reforms for 2026 aimed at restructuring Nigeria’s trade and industrial environment. The measures include reductions in import duties on key commodities such as vehicles, rice, and industrial inputs, alongside the introduction of new excise taxes and a green surcharge regime. The policy also provides zero-duty incentives for critical machinery and infrastructure inputs to stimulate industrial growth, while incorporating supplementary protection measures such as Import Adjustment Taxes and selective import restrictions. These reforms are intended to align Nigeria’s tariff framework with regional commitments, enhance competitiveness, support domestic production, and address inflationary pressures. While the reforms reflect a strategic attempt to balance trade liberalisation with industrial protection, they raise significant policy concerns. Reduced import duties may expose local industries, particularly agriculture and manufacturing, to increased foreign competition without sufficient domestic capacity support. At the same time, new excise taxes and environmental surcharges may increase the cost of goods and services, potentially exerting inflationary pressure on households and businesses. There are also concerns regarding the fiscal implications of the reforms, as lower import duties could reduce government revenue at a time of existing fiscal constraints. The introduction of multiple tariff instruments, including adjustment taxes and prohibition lists, may further create regulatory complexity, uncertainty for investors, and risks of inconsistent implementation. Questions also arise regarding transparency in tariff-setting processes, enforcement capacity, and alignment with Nigeria’s obligations under regional and continental trade agreements. These challenges highlight the risk of policy contradictions, where simultaneous efforts to liberalise imports and protect domestic industries may undermine overall economic outcomes if not carefully managed. Without clear implementation frameworks, monitoring mechanisms, and stakeholder engagement, the reforms may fall short of their intended objectives. Given its constitutional role, the National Assembly has a critical responsibility to ensure that these fiscal measures are transparent, balanced, and aligned with Nigeria’s long-term development goals. Legislative oversight is necessary to safeguard domestic industries, ensure fiscal sustainability, and promote policy coherence. Accordingly, the National Assembly, through its Committees on Finance, Customs and Tariff, Trade and Investment, Industry, Agriculture, and National Planning, may consider the following actions:

2 www.nils.gov.ng 1. Convene a multi-stakeholder oversight hearing by inviting the Federal Ministry of Finance, Nigeria Customs Service, Nigeria Revenue Service, Ministry of Industry, Trade and Investment, and key private-sector stakeholders to clarify the rationale behind tariff reductions and new taxes and assess expected impacts on revenue, inflation, and industrial growth. 2. Assess impact on local industries by commissioning a comprehensive impact assessment on agriculture (rice, palm oil, and sugar), manufacturing, SMEs, and automotive and steel sectors to determine whether adequate safeguards exist. 3. Review revenue implications by examining the net fiscal impact of reduced import duties versus increased excise taxes to ensure revenue neutrality or sustainability and alignment with budgetary projections 4. Mandate periodic reporting from relevant agencies on compliance with new tariff structures, effectiveness of import adjustment taxes and enforcement of prohibition lists. 5. Advise the federal government to also develop mitigation measures to address potential price increases from excise taxes and supply disruptions during the transition period. 6. Ensure that full details of the policy (as indicated for publication in the official gazette) are publicly accessible and subject to stakeholder consultation and feedback.