The Centre for the Promotion of Private Enterprise [CPPE] has advised the federal government to shelve its plan to ban the importation of solar panel into Nigeria.
The CPPE gave the advice on the wake of recent announcement by the Minister of Science and Technology Mr. Uche Nnaji, about the plan of government to ban the importation of solar panels in order to promote domestic production of the panels.
A statement that was issued on April 1, 2025, by the Director/CEO of CPPE, Dr. Muda Yusuf, said: “Currently, Nigeria has one of the worst energy accesses with a per capita electricity consumption of about 160kWh, far below the sub-Sahara average of 350Kwh.
“The adoption of solar energy solution is one of the most impactful government initiatives to tackle this problem and it has gained remarkable traction.
“A ban on the importation of solar panels in the face of glaringly inadequate domestic production capacity would worsen the country’s energy crisis.”
Yusuf explained that banning the importation of solar panel would be a complete negation of the government policy to deepen and promote the adoption of renewable energy solutions by households, small businesses, rural communities and government institutions and other corporate organizations.
He 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.
“The welfare cost of a ban on the importation of solar panels would be incredibly high as a result of the escalation in the cost of acquiring solar solutions.
“It is bad enough that the current cost of acquisition of solar energy solutions is quite exorbitant. What is desirable at this time is to seek ways to drive affordability, rather than escalate costs.”
Yusuf said that the transition process for the domestic production of solar panel in Nigeria should be very painstaking, diligent and gradual because a hasty decision of banning importation of solar panels would be very disruptive and counter-productive.
He said that the contemplation of an import ban is a major trade policy decision, which would demand rigorous, robust and painstaking empirical studies to determine the domestic demand for solar solutions, the domestic capacity to meet those demands, and the implications for the wider economy.
He also said that the minister’s announcement of a planned importation ban is already generating concerns and anxiety among the renewable energy investing community, the business community, households as well as multilateral organizations.
“It has significantly elevated the policy and political risk of investing in renewable energy solutions in Nigeria. 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.
“Banning the importation of solar panels is a fundamental trade policy matter which is not within the remit of the Ministry of Science and Technology.
“The conception, formulation and implementation framework for such policy should normally be driven by the coordinating minister of the economy in collaboration with the Minister of Industry, Trade and Investment and the Minister of National Planning and Budget.
“There should also be a robust stakeholder consultation for an inclusive policy process. This would allow for a comprehensive analysis of the wider economic and social implications of such a fundamental policy change.”
The CPPE recommended that government should rather support investors in the solar panel production with robust fiscal and monetary incentives – tax incentives, tariff concession on intermediate products and concessionary long-term financing at a single-digit interest rate.
It also urged the government to cut the import duty on batteries, inverters and wind turbines to 5.0 percent to improve energy access, energy security and productivity in the economy.
“Meanwhile, it is also important to clarify that Executive Order 5, which the minister alluded to, is a procurement policy which directs the MDAs to give preference to Nigerian service providers in their procurement process for goods and services.
“It is clearly different from a trade policy measure which has wider economic implications and requires a more rigorous study before policy pronouncements are made,” Yusuf said.
