Nigeria Spends 350 Million Litres Annually on Ethanol Imports — Report Urges Local Production

Experts highlight untapped potential in domestic biofuel industry

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By Abebisi Oyebajo| Lagos, Nigeria | May 1, 2026

Nigeria imports approximately 350 million litres of ethanol annually, according to a new report advocating increased domestic production.

Heavy Import Dependence

Nigeria imports 300–350 million litres of ethanol annually to meet a 400-million-litre demand, spending roughly ₦160 billion, according to a May 2026 report by the Nigeria Cassava Investment Accelerator (NCIA) The report notes that Nigeria’s reliance on imports is driven by limited local refining capacity.

Opportunities in Agriculture

Despite being the world’s largest producer of cassava, only about 6% of demand is met locally. Experts urge local production by processing ~3% of Nigeria’s total annual cassava output, which could significantly reduce foreign exchange volatility Experts say ethanol production could boost agriculture, particularly cassava and sugarcane value chains.Speaking on the potential of the country to produce ethanol and stop importation, Rajasekar said existing factories producing ethanol do not have a problem selling their products, and that more giant investors are needed to close the demand gap, but unfavourable policies give undue advantages to importers, creating an unhealthy competition with the local industries.

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He also urged the Federal Government to increase the tariff on imported ethanol and other agricultural products to increase home productivity, adding that “This will bring more factories up in the industry.”

Policy Recommendations

The report calls for incentives, infrastructure investment, and regulatory support for local producers.However, Professor Kolawole Adebayo, a cassava value chain specialist, said increasing the tariff is not necessarily the solution to importation of the product because that would amount to putting the cart before the horse. “If you impose higher tariffs, it will become double jeopardies for the industries. However, coming of other industrial processors will make prices of cassava roots to stabilise because farmers would have ready markets and these fluctuations in prices would reduce. “To make this happen, we need to fix rural roads, power generation, transmission and distribution. I agree that we can produce more locally,” he concurred.

Developing Nigeria’s ethanol industry could reduce import bills and strengthen energy security.