The Centre for the Promotion of Private Enterprise (CPPE) has warned the federal government against imposing a ban on the importation of solar panels, arguing that such a move could worsen Nigeria’s energy crisis, increase the cost of renewable energy, and deter investment in the sector.
The warning follows a statement from the Minister of Innovation, Science, and Technology, Uche Nnaji, in which he announced the government’s intention to halt the importation of solar panels as part of an effort to promote local manufacturing and drive the country’s transition to renewable energy. The decision aligns with a presidential directive aimed at prioritizing local content in science, engineering, and technology.
Speaking at the launch of the NEV T6 electric buses in Abuja last week, Nnaji emphasized that Nigeria has the capacity to produce solar panels locally, citing the National Agency for Science and Engineering Infrastructure (NASENI) as an example of an institution already engaged in local production.
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Nnaji projected that as domestic manufacturing scales up, more Nigerian households and institutions would transition to off-grid solar power solutions, ultimately enhancing energy security. He also highlighted that Nigeria has abundant lithium reserves, which he said would be processed into batteries for electric vehicles and renewable energy storage.
Beyond solar panel production, the minister pointed to the government’s investment in mini-grid solutions aimed at powering hospitals, schools, and businesses. He reassured the public that budget allocations have already been made, with implementation expected to be visible within three to four months.
However, while the government’s ambitions to boost local development of clean energy appear bold and progressive, industry experts and stakeholders have expressed concerns that banning imports at this stage could do more harm than good, given Nigeria’s current energy challenges and the country’s limited capacity for large-scale solar panel production.
CPPE’s Strong Opposition to the Proposed Ban
Dr. Muda Yusuf, the Chief Executive Officer of CPPE, has been one of the most vocal critics of the proposed ban. He warned that Nigeria is not yet ready for such a drastic policy shift, emphasizing that the country has one of the lowest electricity consumption rates in the world. He pointed out that Nigeria’s per capita electricity consumption is just 160kWh, significantly lower than the Sub-Saharan Africa average of 350kWh.
Yusuf said: “It would worsen the problem of energy access as it would make the cost of solar energy solutions prohibitive, putting it beyond the average Nigerian.”
He argued that the adoption of solar energy solutions has gained remarkable traction in recent years and that a sudden ban on imports would severely disrupt the sector, making solar energy unaffordable for millions of Nigerians. He described the move as a contradiction of the government’s policy to expand renewable energy access, which has been a key strategy to address the energy crisis, particularly for households, small businesses, rural communities, and government institutions.
Beyond the impact on affordability, Yusuf stressed that the economic consequences of an abrupt ban would be dire. He explained that solar panels and related equipment are crucial for businesses that rely on off-grid solutions to operate, especially amid the rising cost of diesel and unreliable electricity supply. The restriction of imports would increase the cost of solar installations, discouraging the adoption of clean energy at a time when Nigeria desperately needs alternatives to fossil fuel-based power sources.
Investment Risks and Market Uncertainty
The CPPE’s concerns extend beyond energy access. The organization has warned that the announcement of the proposed ban has already triggered anxiety among investors, businesses, and international partners who have been supporting Nigeria’s renewable energy transition. Yusuf emphasized that the uncertainty surrounding government policies is making the investment climate more volatile, reducing the confidence of both foreign and local investors.
He noted that multilateral organizations, development partners, and renewable energy firms have invested heavily in Nigeria’s solar market in recent years, and any abrupt changes in trade policy could undermine these investments. The fear of policy instability has become a major deterrent for businesses looking to expand their operations in the sector.
“This should be avoided because of the adverse impact on investors’ confidence. Urgent clarification of the government’s position is needed to restore that confidence,” he said.
The CPPE also highlighted that such a decision should not be taken unilaterally by the Ministry of Science and Technology, as trade policy is a multi-sectoral issue that requires input from the Coordinating Minister of the Economy, the Minister of Industry, Trade, and Investment, and the Minister of National Planning and Budget. Yusuf urged the government to engage in broad-based consultations with industry stakeholders before making such a significant policy shift.
“The conception, formulation and implementation framework for such policy should normally be driven by the coordinating minister of the economy in collaboration with the industry, trade and investment minister and the minister of national planning and budget,” he said.
The Misinterpretation of Executive Order 5
A key argument in favor of the ban has been the government’s reference to Executive Order 5, which was introduced to promote local technology development and increase indigenous participation in government procurement. However, Yusuf clarified that the order is not a trade policy and does not mandate a ban on imports. Instead, it directs government agencies to prioritize local service providers in their procurement processes.
He explained that misapplying this order to restrict private sector imports would be a fundamental policy misstep, as it goes beyond the scope of the directive and could create unintended economic disruptions.
CPPE’s Alternative Recommendations
Rather than banning imports outright, CPPE has recommended a more strategic approach that would encourage local production without jeopardizing energy access. Yusuf called on the government to provide incentives to investors in solar panel manufacturing through:
- Tax incentives for companies setting up solar panel production facilities
- Tariff concessions on imported components needed for local manufacturing
- Single-digit interest rate loans for solar manufacturers to help scale production
The CPPE also suggested a reduction in import duties on essential renewable energy components such as batteries, inverters, and wind turbines, bringing the duty down to 5% to make solar solutions more affordable.
Yusuf stressed that the government should be focused on affordability rather than escalating costs for consumers. He noted that Nigeria is still in the early stages of renewable energy adoption, and imposing a ban without first ensuring sufficient local production capacity would be counterproductive.
As concerns over the proposed ban continue to grow, there is mounting pressure on the federal government to reconsider its approach and engage with industry players to develop a more sustainable transition strategy.
Yusuf urged policymakers to prioritize evidence-based decision-making, including rigorous assessments of domestic production capacity, market demand, and the availability of critical raw materials before implementing any restrictive trade policies.