Nigeria’s revised 2026 tariff framework is set to reshape the country’s import bill, with industrial, food, and transport-related sectors emerging as the primary beneficiaries of sweeping duty reductions, while manufactured goods face tighter protection under a contrasting increase in tariffs.
A report by the Financial Market Dealers Association (FMDA) shows that the new tariff regime, anchored on the revised ECOWAS Common External Tariff (CET), reflects a deliberate policy shift aimed at lowering production costs, easing consumer prices, and discouraging the importation of finished goods.
According to the report, the industrial sector recorded the most significant adjustment, with a cumulative tariff reduction of about 568.75 percentage points, followed by food products at 227.5 percentage points and transport-related goods at 120 percentage points. In contrast, manufactured goods saw a net tariff increase of 30 percentage points, making them the only segment facing tighter import conditions.
Industrial inputs dominate gains
The scale of tariff cuts in the industrial sector positions it as the biggest beneficiary of the new policy. Lower duties on imported steel sheets & coils, ceramic tiles, among others, are expected to reduce costs across manufacturing, construction, and infrastructure activities, potentially supporting domestic production.
Data in the report show that industrial imports already account for the largest share of Nigeria’s foreign exchange demand, representing about 49 percent of total import spending between 2023 and the first nine months of 2025, with average annual imports of about $7 billion.
Despite the tariff relief, the report noted that the impact on import volumes may be limited. Empirical evidence suggests Nigeria’s import demand is largely price inelastic, with an estimated elasticity as low as 0.03, indicating that changes in prices may not significantly alter import volumes.
As a result, while costs may decline for manufacturers, the policy is more likely to sustain or gradually increase foreign exchange utilisation rather than reduce it.
Food imports targeted for price relief
Food imports, which account for about 14 percent of Nigeria’s import spending, also benefit from substantial tariff reductions. The policy direction signals an effort to ease food prices amid supply constraints and inflationary pressures.
According to the report, food imports attracted a tariff cut of 228 percent, with average FX demand estimated at $2.13 billion over the review period.
This aligns with broader government efforts to moderate inflation through import cost reductions in consumption-sensitive sectors.
Transport, minerals and agriculture also benefit
Beyond industrial and food imports, transport-related goods recorded a tariff reduction of 120 percent, while minerals and agricultural imports saw cuts of 59 percent and 46 percent, respectively.
Although these sectors account for smaller shares of total import spending, $461.72 million for transport, $438.31 million for minerals, and $216.21 million for agriculture, the reductions could ease input costs in logistics, extractive industries, and agribusiness.
Oil-related imports also saw a modest tariff reduction of 15 percent, with average FX demand of $2.38 billion.
Manufactured goods face a protectionist shift
In contrast, the increase in tariffs on manufactured goods signals a clear protectionist stance. The 30 percent net tariff hike is designed to discourage the importation of finished products and encourage local production.
However, the report notes that weak substitution between imported and locally produced goods may limit the effectiveness of this approach. Higher tariffs on finished goods may not necessarily translate into increased domestic consumption if local alternatives remain insufficient or uncompetitive.
Manufactured imports accounted for about $1.90 billion in average FX demand over the review period, highlighting their significance despite the policy tightening.
FX implications remain significant
Overall, Nigeria’s import bill remains heavily influenced by industrial demand, and the tariff adjustments are unlikely to significantly reduce total imports. Instead, they are expected to alter the composition of imports, favouring inputs over finished goods.
Between 2023 and 2025 (nine months), Nigeria spent a cumulative $44.42 billion on imports across seven major sectors, according to the Central Bank of Nigeria data cited in the report.
Given the dominance of industrial imports, tariff reductions in this segment could sustain foreign exchange demand even as policymakers aim to support domestic production.
The report highlights potential relief from the oil sector, particularly through increased refined petroleum exports. The expansion of the Dangote Refinery, with capacity projected to rise from 650,000 to 1.4 million barrels per day, alongside higher crude production, is expected to boost export earnings.
Nigeria recorded about $6.13 billion in refined petroleum export earnings in 2025, which could help cushion FX pressures linked to import demand.
FMDA noted that the tariff changes reflect a dual strategy: reducing the cost of production inputs and easing consumer pressures while maintaining barriers against finished imports.
However, the report disclosed that Nigeria’s structural reliance on imports means the policy will likely shift the mix of imports rather than significantly cut the overall import bill.