Citation
Prof Kenneth
Amechi, Ife
Visiting Professor, Godfrey Okoye University, Enugu,
Nigeria
ABSTRACT
An energy economist, Professor Ken
Ife, has strongly criticised recent recommendations by the World Bank urging
Nigeria to deepen fuel importation and fully liberalise its downstream
petroleum sector, describing the advice as “ill-timed, backward and inconsistent
with Nigeria’s own laws. Speaking during a televised interview on Nigeria’s economic
outlook, Ife argued that while parts of the World Bank’s latest Nigeria
Development Update were analytically sound, its position on fuel importation
undermines the country’s push for energy independence and local refining
capacity. “He said that you cannot come to a country that is struggling and has
suddenly developed a vision of becoming economically independent, and then
advise it to reverse course and start importing again,” According to him, such
recommendations run contrary to the provisions of the Petroleum Industry Act
(PIA), which prioritises domestic crude supply for local refiners under the
Domestic Crude Obligation framework. “The law is very clear; priority must be
given to local refining capacity. Advising Nigeria to abandon that and return
to import dependence is not only against government policy but against the PIA
law itself,” He warned that increased importation would expose Nigeria to
global supply shocks, drain foreign exchange reserves, and weaken ongoing
investments in domestic refining, particularly at a time when private sector
players are scaling up capacity. He concluded that there is no evidence to
support telling Nigeria to depend on imports when major refining countries are
restricting exports,”
Keywords: Critique, World, Bank, Nigeria,
Development, Report, Draws Legal, Policy Challenge
INTRODUCTION
The World Bank's April 2026 advice, urging Nigeria to
reopen fuel import licenses and deepen downstream sector liberalization has
faced significant backlash, with energy experts arguing the recommendation is
ill-timed, economically regressive, and in direct violation of the Petroleum
Industry Act (PIA). The core legal and policy challenges stem from the
conflict between the World Bank's recommendation to import and Nigeria’s stated
goal of local energy self-reliance, particularly via the Dangote Refinery. (Ife
2026).
On inflation and cost
of living, he argued that Nigeria’s challenges are not due to a lack of
resources but policy inconsistencies in implementing domestic supply
frameworks. “Fuel price pressures in Nigeria are largely contrived. If local
refiners are given crude at the terms stipulated by law, they will stabilise
prices and reduce volatility,” he explained. He also took issue with the Bank’s
push for expanded social safety nets funded through borrowing, warning that
such measures contradict Nigeria’s fiscal laws. “Social safety nets are
necessary, but you do not borrow to share money. The law allows borrowing for
capital projects and human development, not consumption. If support is needed,
let it come as grants, not loans,” he said.
It should be recalled that the World Bank’s
recommendations have sparked renewed debate over Nigeria’s fuel policy, with
critics warning that increased importation could undermine recent gains in
local refining and expose the economy to external shocks. The remarks came amid
growing debate over the World Bank’s position on Nigeria’s fuel supply strategy
and downstream reforms. He
made this known during a televised interview on Nigeria’s economic outlook,
where he assessed the bank’s latest Nigeria Development Update. While
acknowledging parts of the report as analytically sound, he argued that its
stance on fuel imports contradicts Nigeria’s policy direction. “We are building
refining capacity that will exceed local demand and position Nigeria as an
energy exporter. How can anyone recommend that we abandon this and return to
reckless importation?” he queried. The economist further described the
recommendation as lacking empirical grounding. While acknowledging the World
Bank’s accurate assessment of Nigeria’s macroeconomic trends, such as GDP
growth projections and sectorial performance. Ife maintained that its stance on
fuel policy could worsen economic conditions.
Professor Ife concluded
that Nigeria’s long-term economic stability lies in reducing import dependence
and strengthening local value addition across sectors. “The sustainable path is
clear; develop local refining, expand processing capacity and build economic
sovereignty. Exporting raw materials and importing finished products only
exports jobs and imports poverty,” he added.
Conceptual
Reviews from Legal and Policy
Challenges
Violation of the Petroleum Industry Act
(PIA): Experts,
including Prof. Ken Ife, argue that encouraging fuel imports violates the PIA
2021, which mandates prioritizing local refining and supplying domestic crude
to local refiners under the Domestic Crude Obligation framework.
Undermining Investment (Investor
Confidence): The Dangote Refinery, representing a
multi-billion-dollar investment, provides a significant share of Nigeria's
petrol. Critics argue that shifting policy back to imports (reopening licenses)
penalizes local refining and discourages future investment in domestic infrastructure.
Economic Sovereignty & National
Security: The
recommendation is viewed as a reversal of Nigeria's push for energy
self-reliance, returning the country to "reckless" import dependency
at a time when major refining nations are restricting exports.
Contradiction with Fiscal Responsibility
Laws: The
World Bank's suggestion to fund expanded social safety nets through borrowing
is criticized as violating laws that restrict borrowing to capital projects
rather than consumption.
Contrived Pricing Concerns: Critics
note that fuel price pressures are "contrived" by inefficient supply
management rather than lack of local supply, arguing that enforcing the PIA’s
local supply laws would stabilize prices better than importing.
The
Guardian Nigeria News: Backlash and Clarification
Report Withdrawal: Following
intense criticism and debates over the feasibility of the recommendations, the
World Bank temporarily took down its Nigeria Development Update report from its
website.
Revaluation of Import Costs: While
the World Bank suggested imports were ~12% cheaper, critics question this,
stating it ignores full logistics costs (freight, insurance, storage) and that
domestic production is key to long-term economic sustainability.
Call for Gradualism: The
Bank subsequently clarified that its position was not a "blanket
endorsement" and that reforms should be gradual and carefully managed to
avoid damaging local refining.
Summary
of Expert Position: The consensus among critics is that
to improve economic conditions, Nigeria must enforce the PIA to prioritize
local refining, rather than reverting to imports which risk triggering higher
inflation and increased foreign exchange pressure.
Chima Nwokoj (2026) said that the World Bank has raised concerns over Nigeria’s
fiscal framework, revealing that more than N34.53 trillion was diverted from
federation revenue over the past three years through pre-distribution
deductions. In its latest Nigeria Development Update obtained from its website,
the global lender disclosed that although total federation revenue rose sharply
to about N84 trillion between 2023 and 2025,
about 41 per cent of the earnings did not reach the Federation Account for
distribution to the federal, state and local governments. According to the
report, gross revenue increased from N17.08 trillion in 2023 to an estimated
N37.44 trillion in 2025. However, deductions classified as “first-line charges”
also rose significantly, from N6.22 trillion to nearly N15 trillion within the
same period, reducing the pool of funds available for distribution.
The World Bank noted
that the development has created a paradox in which rising revenues have not
translated into improved public spending capacity, as a substantial portion is
automatically retained by certain agencies before allocation. It explained that
reforms such as the removal of petrol subsidy and foreign exchange adjustments
boosted nominal revenues, but much of the gains were offset by the structure of
deductions tied to cost of collection and statutory transfers.
Agencies such as the
Nigeria Customs Service, Nigerian National Petroleum Company Limited, and the
Federal Inland Revenue Service account for a significant portion of these
deductions. The report stated that their funding is based on fixed percentages
of gross revenue, leading to higher allocations as revenues increase. Describing
the model as “pro-cyclical”, the Bretton Woods institution said it operates
outside the conventional budgetary framework and weakens legislative oversight.
In some cases, allocations to individual agencies exceed the revenues of
several states and even the budgets of key federal ministries.
The report also
highlighted the impact on public finances, noting a decline in capital
expenditure from N5.5 trillion in 2024 to N4.5 trillion in 2025, with only
about 25 per cent of the approved capital budget implemented. Meanwhile, the
federal fiscal deficit remained elevated at N16.9 trillion, driven by debt
servicing and recurrent expenditure. The World Bank warned that the current
arrangement undermines fiscal transparency and accountability, as significant
portions of public revenue are spent outside the standard appropriation
process.
Providing expert
insight, an economist at Covenant University, Yemisi Ayinde, said the issue
reflects deeper structural weaknesses in Nigeria’s public finance system. He
explained that the diversion of about 41 per cent of federation earnings
through pre-distribution deductions points to “a broader framework of fiscal
fragmentation, bureaucratic self-allocation and weak legislative appropriation
control”, resulting in what he described as a parallel fiscal system. According
to him, statutory revenue retention mechanisms, initially designed as
cost-recovery tools, have evolved into entrenched structures that distort
resource allocation and weaken the link between macroeconomic reforms and real
sector outcomes.
Yyinde (2026) added
that the trend has created a macro-fiscal paradox of rising revenues alongside
shrinking discretionary fiscal space, leading to constrained capital formation,
weaker fiscal multipliers and increased dominance of debt servicing over
development expenditure. He further noted that the arrangement raises concerns
about transparency, accountability and legal compliance, warning that it could
erode parliamentary control over public finances and weaken the social
contract.
Also commenting,
President of the Capital Markets Academics Association of Nigeria, Uche
Uwaleke, (2026) described the World Bank’s findings as valid and consistent
with concerns previously raised by local experts. “The Federation Account has
continued to experience leakages despite reforms,” he said, noting that measures
such as Executive Order were steps in the right direction but insufficient. Uwaleke
called for stronger efforts to reduce the high cost of revenue collection,
which he said is inconsistent with global best practices, adding that broader
reforms are needed to plug persistent leakages.
Muda Yusuf, (2026), Chief
Executive Officer of the Centre for the Promotion of Private Enterprise, similarly,
stressed the need for improved transparency and accountability across all tiers
of government to ensure that increased revenues translate into better living
conditions for citizens. The report, titled “Nigeria’s Tomorrow Must Start
Today: The Case for Early Childhood Development”, also highlighted longstanding
weaknesses in Nigeria’s budget process, including the absence of a
comprehensive organic budget law. It noted that delays in budget approval, such
as the late passage of the 2025 budget and the delay in approving the 2026
budget as of March 25, 2026, have reduced predictability for programme
implementation.
According to the World
Bank, weak coordination between the executive and legislative arms has led to
frequent and often untracked changes to budget proposals, undermining
macro-fiscal planning. “These weaknesses have contributed to unrealistic
revenue and capital expenditure projections that are consistently missed,” the
report stated, adding that the extension of budget cycles has resulted in
overlapping implementation and weakened financial reporting.
To address the
challenges, the World Bank recommended a comprehensive overhaul of the revenue
management framework, including channeling agency funding through the annual
budget process and subjecting it to legislative approval. It also called for a
reduction in cost-of-collection charges and the elimination of fixed-percentage
allocations, noting that such reforms would boost net revenues available for
development. The institution cautioned that failure to implement these measures
could further constrain Nigeria’s fiscal space and undermine recent economic
reforms.
Reactions As World Bank Says Nigerian Economy Resilient,
Will Grow In 2026
Mark
Itsibor
(2026) reported that Nigeria’s
economy is projected to remain resilient in the face of mounting global
uncertainties, with the World Bank forecasting a 4.2 per cent growth rate in
2026. However, the institution has warned that rising fuel costs and persistent
inflation — exacerbated by geopolitical tensions in the Middle East could undermine household incomes and slow
poverty reduction.
Speaking in Abuja, the
bank’s lead economist for Nigeria, Fiseha Haile, noted that while the ongoing
U.S./Israel-Iran conflict has pushed up prices, overall economic activity has
remained largely intact. According to him, business activity has continued to
expand in recent months, indicating that the broader impact on growth has been
“relatively contained,” even as inflationary pressures intensify.
Nigeria’s
inflation rate, though significantly reduced from around 33 per cent in
December 2024 to 15.06 per cent in February 2026, remains elevated compared to
regional peers. The renewed surge in fuel prices reportedly rising by over 50
percent during the Iran conflict has fed into transportation, food, and
production costs, amplifying the cost-of-living crisis The World Bank urged Nigerian
authorities to adopt prudent macroeconomic measures, including tightening
monetary policy, avoiding blanket subsidies, and saving windfalls from higher
oil prices to strengthen fiscal buffers. He recommended reconsidering
restrictions on fuel imports as a potential tool to ease inflationary
pressures.
The economic reforms
under President Bola Tinubu including the removal of fuel subsidies, exchange
rate unification, and tax restructuring were acknowledged as ambitious steps
aimed at stabilising the economy. These reforms have contributed to improved
external buffers, with rising foreign exchange reserves and reduced volatility.
Additionally, Nigeria’s fiscal deficit stood at 3.1 per cent of GDP in 2025,
while the debt-to-GDP ratio declined for the first time in a decade. The World
Bank cautioned that tighter global financial conditions could still pose risks
to capital inflows, borrowing costs, and remittances.
Experts Push Back on World Bank Prescriptions
Despite the cautiously
optimistic outlook, Nigerian economic experts have expressed strong
reservations about the World Bank’s recommendations, particularly its advocacy
for free trade and fuel import liberalisation. A development economist and
consultant to ECOWAS, Professor Ken Ife, criticised the World Bank’s policy
stance as overly aligned with Western economic interests. According to him, the
push for free trade often disadvantages developing economies by encouraging
import dependence rather than domestic production. “Countries like China and
Kazakhstan prioritise protecting their domestic economies,” Ife argued, noting
that China imports crude oil but restricts exports of refined products to
safeguard local industries. He drew parallels with the COVID-19 pandemic, when
countries such as India curtailed pharmaceutical exports despite relying on
imported raw materials. Similarly critical of the World Bank’s position,
economic analyst Okey Inuegbu dismissed the institution’s forecasts and policy
advice, arguing that they have historically failed to benefit developing
economies. “The government should not rely on the World Bank’s
recommendations,” he said, urging policymakers to prioritise domestic
production as the cornerstone of economic recovery.
Ife, (2026) however, acknowledged the validity
of the World Bank’s concerns regarding inflation. He agreed that the sharp rise
in fuel prices inevitably triggers higher transportation and food costs,
compounding inflationary pressures already influenced by seasonal and
security-related factors. On fiscal policy, the development economist strongly
supported the call to save oil windfalls but criticised the government’s
spending patterns. He argued that Nigeria should channel excess oil revenues
into strategic reserves, foreign exchange buffers, and the sovereign wealth
fund to create long-term economic stability. “Conventional wisdom dictates that
some of this revenue should go into reserves and debt reduction to create
fiscal space,” Ife said. He also warned against excessive public spending
following the recent expansion of the national budget to N68 trillion.
He advocated the
establishment of strategic crude reserves in oil-producing states such as
Bayelsa, Rivers, and Ondo, which could support local refineries and stabilise
supply. In a more controversial stance, Ife called for restructuring the
Nigerian National Petroleum Company Limited (NNPCL), urging it to exit
midstream and downstream operations. “They should focus on upstream activities
and divest from refineries,” he said, blaming inefficiencies in the sector for
Nigeria’s continued reliance on fuel imports. Ife also rejected the World
Bank’s recommendation to liberalise fuel imports, describing it as inconsistent
with Nigeria’s Petroleum Industry Act (PIA), which prioritises domestic
refining. He argued that expanding imports would undermine local refining capacity
and perpetuate economic vulnerabilities. (Ife 2026).
On his part, Inuegbu (2026)
emphasized that addressing insecurity particularly in key agricultural regions
such as Benue State could yield immediate economic benefits by enabling farmers
to return to their fields. He described this as a short-term solution with
rapid impact, given Nigeria’s seasonal farming cycles. “If security is restored, production will
rise almost immediately,” he noted, adding that increased agricultural output
would reduce dependence on imports and ease inflationary pressures. He also
advocated for labour-intensive public works programmes to tackle unemployment,
suggesting that the government could engage citizens in infrastructure
maintenance while paying minimum wages. On fuel policy, Inuegbu aligned with
Ife in opposing import liberalisation. He argued that increased imports would
drive prices higher due to foreign exchange costs, whereas supplying crude oil
to domestic refiners in naira could stabilise prices.
He pointed challenges
faced by local refineries, including those operated by the Dangote Group, which
have had to rely on imported crude due to supply constraints. According to him,
strengthening domestic supply chains and building fuel reserves would be more
effective than opening up imports. The divergence between the World Bank’s
recommendations and local expert opinions underscores a broader debate about
Nigeria’s economic direction. While international institutions emphasise
market-driven reforms and fiscal discipline, domestic analysts are calling for
a more protectionist, production-focused approach tailored to Nigeria’s unique
challenges. Both sides, however, agree on key risks: inflation remains a
significant threat, fuel price shocks continue to ripple through the economy,
and without careful policy calibration, gains in growth could be undermined by
declining living standards. (Inuegbu, 2026)
President of the Institute of
Professional Economists and Policy Management (IPEPM), Prof. Kenneth Ife, has
said that closing gender gaps and fully unlocking women’s economic potential
could add $12 trillion to the global economy. He warned that Nigeria cannot
achieve inclusive or sustainable growth without prioritising women’s
participation. Ife spoke during the launch of the Women in Economics and
Development Foundation (WEDF), themed “A Catalyst for Inclusive Growth and
Sustainable Development”, and the unveiling of the organisation’s empowerment
programme in Abuja
Meanwhile, Founder of WEDF, Dr
Annette Mubarak, said that the Foundation emerged from a burning desire to see
women rise as catalysts for economic transformation and digital innovation. She
noted that women’s contributions from the classrooms, corporate offices, or
ministries have often been undervalued. Mubarak, who said the Foundation’s
programme would focus on capacity development, mentorship, entrepreneurship,
access to finance, and policy advocacy, described the initiative as the
beginning of a revolution of minds, opportunities, and transformation,
reiterating that women are not waiting for change; they are the catalysts of
change.
Ife, a global economic analyst,
noted that women contribute 43 of agricultural labour and represent one in
three businesses, yet they receive less than 10 per cent of available venture
capital. He lamented that in Nigeria, women constitute roughly 49 per cent of
the population, but hold only 22 per cent of senior economic leadership
positions. The don, therefore, warned that these structural inequities come at
a high cost, saying that closing the gender gap in economic participation could
contribute an additional $12 trillion to global economic output. He also
stressed that improving gender parity could strengthen governance and national
economic resilience, saying that countries with more equitable participation of
women in economic decision-making experience higher GDP growth and progress
toward Sustainable Development Goals (SDGs), including poverty reduction,
gender equality, decent work, and strong institutions. (Ife, 2025).
(Ife, 2026), however, urged
policymakers, institutions, and private sector actors to create platforms and
strategies that would integrate women into key economic decision-making spaces,
saying that unlocking women’s economic power is central to Nigeria’s growth and
Africa’s development. He said: “The opportunity of unlocking women’s economic
power allows you to boost GDP, give you stronger SMEs, create more resilient
households, increase employment and also improve governance.
Nigeria’s Challenges Due to Inconsistencies in
Implementing Domestic Supply Policies’
On in
inflation and cost of living pressures, the economist said Nigeria’s challenges
are not due to resource constraints but inconsistencies in implementing
domestic supply policies. “Fuel price pressures in Nigeria are largely
contrived. If local refiners are given crude at the terms stipulated by law,
they will stabilise prices and reduce volatility,” he said. The expert further
criticised the World Bank’s push for expanded social safety nets funded through
borrowing, warning that such measures could worsen fiscal pressures. Social safety nets are necessary,
but you do not borrow to share money. The law allows borrowing for capital
projects and human development, not consumption. If support is needed, let it
come as grants, not loans,” he said.
CONCLUSION
Prof Ife concluded that there is no evidence to
support telling Nigeria to depend on imports when major refining countries are
restricting exports,” That Nigeria’s long-term economic
stability lies in reducing import dependence and strengthening local value
addition across sectors. “The sustainable path is clear; develop local
refining, expand processing capacity and build economic sovereignty. Exporting
raw materials and importing finished products only exports jobs and imports
poverty,”
RECOMMENDATIONS
Develop local refining, expand
processing capacity, and build economic sovereignty. Exporting raw materials
and importing finished products only exports jobs and imports poverty.
Nigeria’s long-term economic stability depends on reducing import dependence
and strengthening local value addition across sectors.
On inflation and cost of living pressures, the economist said
Nigeria’s challenges are not due to resource constraints but inconsistencies in
implementing domestic supply policies. “Fuel price pressures in Nigeria are
largely contrived. If local refiners are given crude at the terms stipulated by
law, they will stabilise prices and reduce volatility,” he said. The expert
further criticised the World Bank’s push for expanded social safety nets funded
through borrowing, warning that such measures could worsen fiscal pressures.
“Social safety nets are necessary, but you don’t borrow to share money. The law
allows borrowing for capital projects and human development, not consumption.
If support is needed, let it come as grants, not loans,” he said. “The
sustainable path is clear; develop local refining, expand processing capacity,
and build economic sovereignty. Exporting raw materials and importing finished
products only exports jobs and imports poverty.”
REFERENCES
Daly trust
World Bank Daily Trust (2026) https://dailytrust.com/world-bank-fuel-import-advice-retrogressive-violates-pia-energy-expert
World Bank’s dangerous advice https://businessday.ng/backpage/article/how-policy-inconsistencies-hamper-nigerias-industrial-targets/ how policy
inconsistencies hamper Nigeria's industrial.
Bunmi Aduloju (2024, March).
N20trn take-off capital’ what to know about FG’s renewed hope infrastructure
fund. The Cable.
Department of Transport.
(2024). Reported road casualties Great Britain, provisional results:
Emmanuel, J. (2024, May). Thirteen
years after, Tinubu commissions N35 billion Southern Parkway. Nigeria
Info FM.
Francisca Oluyole (2017,
December). ANALYSIS: Ajaokuta: How Nigeria’s largest industrial project failed.
Premium
Gülen, G., Makaryan, R., Volkov,
D., & Foss, M. (n.d.). Improving regulatory agency efficiency and
effectiveness: Best practices, processes and organizational structures
Gift ChapiOdekina (2024, May).
Nigeria spent 8 billion dollars to import steel, annually — Minister. Vanguard
Newspaper. https://www.vanguardngr.com/2024
Hassan, I. (2021, November). The
EFCC and ICPC in Nigeria: Overlapping mandates and duplication of effort in the
fight against corruption (Anti-Corruption Evidence Working Paper
Micheal Ani (2020, January).
Ajaokuta Steel: Reviving Nigeria’s failed industrial project. Business
Times. https://businessday.ng
National Bureau of Statistics. (2024). Rail
transportation data 2023. https://nigerianstat.gov.ng/elibrary/read/1241483
Narasimha, D. R., &
Subhashish, G. (2006). Regulatory framework for infrastructure (INRM
Policy Brief No. 8). Asian Development Bank. https://www.adb.org
Office of Gas and Electricity
Markets (Ofgem). (n.d.). Our role and responsibilities. https://www.ofgem.gov.uk/our-role-and-responsibilities
Office of Rail and Road.
(2023). Rail safety: April 2022 to March 2023. https://dataportal.orr.gov.uk/media/ktvneim0/rail-safety-2022-23.pdf
Office of Rail and Road.
(2024). Passenger rail usage: January to March 2024. https://dataportal.orr.gov.uk/media/15nga1q4/passenger-rail-usage-jan-mar-2024.pdf
Office of Rail and Road (ORR).
(n.d.). Our functions. https://www.orr.gov.uk/about/how-we-work/strategy-duties/our-functions
Office of the Secretary to the
Government of the Federation. (2024). Redefining of the presidential
priorities areas of President Bola Ahmed Tinubu administration. https://www.osgf.gov.
Ojeme, V. (2022, November).
Funding SON to achieve compliance to industrial standards. Vanguard. https://www.vanguardngr.com/2022/11/fundi
Okechukwu Nnodim (2021, April).
Nigeria businesses lose $29bn annually to poor electricity – World Bank. Punch
Newspaper. https://punchng.com/nigeria-businesses-lose-29bn-annually-to-poor-electricity-wbank/
Onuba, I. (2024, May). How NNPCL,
partners broke record with three critical gas projects months before delivery
date. This Day.
Resimić, M. (2023, October). Corruption
and anticorruption efforts in Nigeria’s electricity sector. Transparency
International.
Statista. (2023). Number
of train accidents in Nigeria from 2014 to 2018. https://www.statista.com/statistics/1265191/number-of-train-accidents-in-nigeria/
Veriv Africa. (2024,
August). The effectiveness of public-private partnerships (PPPs) in
Nigeria’s infrastructural development
World Bank. (n.d.) World
development indicators. https://databank.worldbank.org/source/world-development-indicators
