Nigeria Banks Agencies from Importing Foreign Goods, As Experts Warn It May Worsen Inflation

President Ball Tinubu announced a removal directive that prohibits all ministers, departments, and agencies (MDA) from the acquisition of foreign goods and services where local alternatives exist.

The policy, called Nigeria First Policy, was one of the resolutions adopted at Monday's Federal Executive Council (FEC) meeting and announced Sunday Dare, the President's special advisor to the media and public communication, through his official X account. It requires all MDAs to prioritize Nigerian goods to the acquisition, unless a departure is provided by the Bureau of Public Procurement (BPP).

According to President Tinubu, the goal is to “invest in our people and our industries by changing how we spend, get, and build.” He added: “The forward, the Nigerian industry is leading all the acquisitions. Where the local supply is short, the contracts are outlined to generate capacity here. Contractors will no longer serve as mediators who have been able to hold foreign goods as local factories live.”

Includes new policies:

• A ban on foreign goods for obtaining the government where local choices exist.
• The mandates of the acquisition of all MDAs to align their budgets with local content rules.
• Penalties for violations, including cancellation of contracts and discipline actions.
• A new framework of compliance with the locally content In Implement by BPP.

While the presidency insists that it marks the start of a new era of “business, self-reliance, and national pride,” some economists and industry leaders have raised concerns that the policy may prevail and may exacerbate existing inflationary pressure.

Echoes of banning food importing

The policy has drawn comparisons to the Central Bank of Nigeria restrictions on Forex for imports of food and agriculture in the previous administration, A motion already is also intended to boost local production. However, instead of spurring food security, the decision aggravated food deficiency and aid in fuel runaway inflation. A similar trajectory, analysts are afraid, can open up if the government fails to meet the deep challenges faced by domestic manufacturers before implementing such a ban.

In the midst of criticism is the condition of the Nigerian manufacturing environment, which players in the industry say is nothing but enabling. Businesses continue to fight improper power supply, poor infrastructure, multiple taxation, foreign exchange, and low credit access.

Manufacturers continue to decompose the cost of running diesel generators, the difficulty of importing machinery due to forex barriers, and bottlenecks in ports and customs to delay the time.

Manufacturers of Nigeria (people) manufacturers often call on the government to fix these structures previously attempt to implement Protectionist policies. In the latest insight into the industry, the person noted that the use of capacity remains low, and local manufacturers pour jobs in response to increased costs.

Calls for a phased, approach to developing capacity

Against the backdrop of An non -friendly business environment, Nigeria First Directive critics encourage the federal government to re -consider the timeline and implementation strategy. Some experts note that instead of imposing an immediate prohibition, the government must first promise to regulate electricity, improve financial access, and reduce bureaucratic red tape. Only then, they say, should it begin to phase on foreign acquisition restrictions.

Tinubu's directive also arrived at a time when the Nigerians were already tiring to the impact of past economic reforms. Because of the removal of the fuel subsidy and the unity of the Naira exchange rate in 2023, inflation grew, food prices jumped, and household income fell.

While the government is defending the reforms, focusing that these painful decisions are required to stabilize the economy and attract investment, many Nigerians say they have yet to see The promised benefits. This Getting policyMany believe, Moving more public costs can end, especially if this leads to increasing pricing for government contracts relying on poor local supply chains.

A better alternative?

Policy observers say the government's acquisition plan can still succeed – if it includes urgent investments in power, industrial infrastructure, and business credit. National Sugar Master Plan II, which is tied to industry quota allocations to show local investment, is mentioned in the presidency statement as a model. However, the scale and the hurry needed to copy such a structure to all sectors remains scary.

There is also a concern that the government has failed to repeatly practice what it is preaching, as most government goods, including cars, come from overseas. Political leaders are also known to be known for medical tourism, which neglects the Nigerian health system.

“The man [President Tinubu, his] The official car is a Cadillac Escalade SUV made by an American company. We have Innoson Motors, he doesn't buy from them. We have Nord Motors, he didn't buy it to use. But he tells others to buy 'done in Nigeria', “said Olufunmilaayo, a concerned Nigerian.

Ultimately, while Nigeria First Policy can be framing as a patriotic shift, experts insist that only slogans do not drive industrial development. The premise – electricity, capital, infrastructure and a good example from the government – should be preceded.