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N804bn arms imports spark calls for local production

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Nigeria spent N804.10bn on arms and ammunition imports between 2020 and the second quarter of 2025, according to data obtained from the National Bureau of Statistics.

Despite moves by the government to expand domestic production, recent data revealed that the import bill remains on the rise, raising concerns about foreign exchange depletion and national security dependence on external suppliers.

This came as local manufacturers increased the call for deeper collaboration with the country’s Armed Forces for the production of some arms and ammunition domestically, stressing that this would considerably reduce the huge FX spent on arms imports.

Foreign trade data from the NBS showed that in 2020, Nigeria imported arms and ammunition, including parts, worth N29.24bn. The import bill surged to N72.50bn in 2021 before dropping to N28.24bn in 2022. In 2023, imports jumped again to N127.16bn. By 2024, it rose astronomically to N520.02bn, recording the highest importation of arms and ammunition in the five years.

Between January and June 2025, Nigeria imported arms worth N26.95bn, indicating that the upward trend had not abated. Data showed that in the first quarter of 2025, arms and ammunition imports stood at N22.08bn, with an additional N4.87bn imported in the second quarter. This brought the total to N26.95bn in the first half of 2025 alone.

Official data showed the depth of the surge when compared with the corresponding period of 2024. In H1 2024, Nigeria imported N11.76bn worth of arms and ammunition, split between N10.72bn in Q1 and N1.04bn in Q2. But in the second half of 2024, Nigeria imported arms and ammunition worth N508.25bn. Split between the quarters: in Q3 2024, the country imported N24.40bn, and in Q4 2024, it imported arms and ammunition worth N483.85bn

Stakeholders react

Stakeholders say the persistent rise in arms imports proves that Nigeria’s local defence manufacturing capacity has not hit its stride despite government reforms. President Bola Tinubu, in November 2023, signed the Defence Industries Corporation of Nigeria Act, which repealed previous provisions and sought to create a robust military-industrial complex through research, innovation, and private sector partnerships.

Two years into the implementation of the DICON Act 2023, reforms are off to a slow start. The import figures show that foreign dependence remains dominant.

Industry players, including the Manufacturers Association of Nigeria and the National Association of Small-Scale Industrialists, Centre for the Promotion of Private Enterprise, argue that heavy imports drain scarce foreign exchange. In separate interviews with The PUNCH, these stakeholders noted that buying weapons abroad often exposes Nigeria to political pressures from supplier countries, a factor that undermines the country’s sovereignty.

Local manufacturers are calling for stronger collaboration with the Defence Industries Corporation of Nigeria. They insist that without scaling up indigenous production, the country will continue to burn scarce resources on foreign procurements while failing to unlock the economic opportunities in defence manufacturing.

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MAN seeks inclusion

The Director-General of MAN, Segun Ajayi-Kadir, revealed that the body was already engaging DICON to expand local defence production. He said, “We are in talks with DICON. And in MAN, we have members who manufacture military hardware. Collaboration is only a foregone conclusion. It would be nice to see private and public sector partnerships flourish in this regard, because this is a strategic as well as an economic game changer for Nigeria.”

Ajayi-Kadir stressed that DICON, once moribund, had shown renewed dynamism since its revival under the new law. He observed that a functional defence industry would address two strategic concerns: national security and economic stability.

He explained that local arms production would shield the country from external embargoes, strengthen territorial defence against insurgency, and save scarce foreign exchange. “There’s no doubt that investing in local arms and ammunition manufacturing would significantly improve the economy overall, in the sense that it is not only in terms of boosting our security,” he declared.

MAN’s DG added that Nigeria ought to pursue arms self-reliance for external sovereignty and internal security. “There was a time in this country that some modern nations refused to sell arms to us,” Ajayi-Kadir said.

“Self-sufficiency, or reduction in dependence on imported arms, will greatly enhance the capacity to defend the territorial integrity and to protect the lives of citizens, particularly now that we are having insurgency and activities of non-state actors. In terms of securing lives and preserving foreign exchange, local production will greatly help.”

Ajayi-Kadir argued that foreign exchange saved from reducing arms imports could be channelled into raw materials, spare parts, and other productive inputs. He added that indigenisation of defence technology could also position Nigeria as an exporter in the medium term. “It will also be able to get us to innovate in a way that we can have military hardware and technologies that are indigenous to us, which we could even export. It will deepen our economic stability and progression,” he maintained.

NASSI, CPPE speak

The National Vice President of NASSI, Segun Kuti-George, linked the ballooning import bill to weak local research and insufficient industrial participation. He noted that while small-scale players had yet to feature prominently in arms production, they could play a critical role if given access to science-driven innovation.

Kuti-George said, “Arms are generally used for defence. And when you have an excess of it, you export. When you are manufacturing locally, you are saving foreign exchange. God help you if your supplier is a friend of your attacker. Encouraging local manufacturing is very important.”

He urged Nigeria to learn from countries that deliberately invest in research and innovation to address security vulnerabilities. He cited Lithuania’s adoption of drone training from basic school and the emergence of private drone manufacturers in Abuja as examples of what deliberate research could achieve.

“We need to pay more attention to science and research. That is the only way forward. Let’s teach science. Let’s teach research in our universities. Let’s stop all these ideas of people just writing pieces and filing them away. We are living in a practical world now,” NASSI’s VP said.

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Kuti-George advised that graduates of engineering and science in Nigeria should be producing machines and prototypes as part of their final projects, rather than submitting theoretical dissertations.

He stressed that linking education to practical research was key to reviving the industrial base. “Where is the machine that you are producing? Are you able to produce a garri frying machine? Are you able to produce something practical? That is the way. We need to do a serious review of our educational system,” he cautioned.

Kuti-George welcomed the government’s recent push on vocational colleges but called for a deeper emphasis on applied research to complement military innovation.

Director of the Centre for Promotion of Private Enterprise, Dr Muda Yusuf, affirmed Nigeria’s need to be self-reliant in defence manufacturing and avoid heavy importation of arms and ammunition. He welcomed the local manufacturers’ quest for deepening their partnership with the government as “a very good thing, and it’s something to be commended.”

He emphasised local production as the path to internal security, stating, “Local production is the way to go anytime and any day. It is good for self-reliance and for internal security. When it comes to security matters, the less import-dependent a country is, the better. Look at the biggest or the strongest countries in the world, they don’t rely on imports for their security apparatus or for their security equipment.”

Yusuf concurred with MAN that an increase in local manufacturing of defence equipment would help to reduce forex outflows and ensure sovereignty. “Building our domestic capacity in arms manufacturing helps with retaining foreign exchange and makes us a lot more secure, a lot more confident as a country, so that if we have security challenges, we can handle them by ourselves without depending on third parties.”

He welcomed the revamping of DICON, adding, “Those who moved in the government to set up a Defence Industrial Corporation of Nigeria, in Kaduna, had foresight. They had the foresight, and the whole idea was to ensure that much of our security equipment, arms, and ammunition are produced here.”

“It’s just that we didn’t follow through,” Yusuf noted, and decried the poor management in the past. “Once, we had to depend on a particular country for some arms or aircraft at the peak of the Boko Haram crisis, and they were giving us conditions before they could sell it to us. They gave us all sorts of conditions that were not properly aligned with our security strategy.”

DICON reforms

The Defence Industries Corporation of Nigeria was established in 1964. Under the 2023 Act signed by President Tinubu, DICON is repositioned. The new law empowers the state-controlled firm to operate subsidiaries, establish a Defence Industry Technology, Research, and Development Institute, and provide a financing architecture to attract private capital into the sector.

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Following President Tinubu’s assent, DICON signed memoranda of understanding with several firms in 2024, including X-Shield Solution Company Limited, Buckler Systems Limited, and Epsilon Bronberg Innovation Limited. The agreements were designed to build a military-industrial complex through public-private partnerships.

In July 2025, DICON announced a $2bn partnership with SP Offshore Nigeria Limited to expand local manufacturing of defence hardware.  Director-General of DICON, Major General Babatunde Alaya, said the partnership aligned with the government’s projection to achieve self-sufficiency in defence manufacturing by 2027. “This partnership will achieve the Federal Government’s projection of achieving self-sufficiency in defence manufacturing while reducing foreign importation by the year 2027,” he stated.

Similarly, the Managing Director of DICON Grey Insignia, Bem Garba, reportedly affirmed that the new law would directly impact the naira by reducing dollar demand for arms imports. “By localising production, we can retain more of our FX reserves and reduce the demand for dollars in the defence sector, easing pressure on the exchange rate. As the industry matures, Nigeria can position itself as a regional defence supplier, earning FX through exports,” he said.

Balancing security

Stakeholders argue that local defence manufacturing is not merely an economic policy but also a strategic necessity. With insecurity ranging from insurgency in the North-East to banditry in the North-West and kidnapping in the South, these stakeholders have cautioned that dependence on foreign arms is a dangerous liability.

Ajayi-Kadir warned that the country’s fragile foreign reserves should not be further eroded by massive import bills. He said, “We have scarce resources that we should have used to buy raw materials, spare parts, and machines that are not available locally for production, but we end up using them to buy ammunition. I believe this is both for a strategic purpose as well as for economic purposes.”

Kuti-George also emphasised that the more Nigeria invests in local innovation, the more it could reduce reliance on hostile suppliers. “If your supplier is a friend of your attacker, it now becomes an issue of who is the highest bidder. So, encouraging local manufacturing is very important,” he said.

Experts say the path to a self-sufficient defence industry will require more than legislation. The local defence industry needs stronger funding for research, stronger collaboration with private manufacturers, and reforms in science education.

For MAN, the next step is a deeper integration of its members into DICON’s supply chain. For NASSI, the priority is building a pipeline of innovators through vocational and research-based education. For DICON, it is expanding partnerships and ensuring that promised targets, such as the 2027 self-sufficiency goal, are met.

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VIDEO: Stop Buying Rolls-Royce, Use The Money To Build Industries Instead – Dangote Tells Wealthy Nigerians

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Olarenwaju disclosed that Jonathan betrayed a gentleman’s agreement with Atiku, hence the former Vice President moved against him in 2015.

Aliko Dangote, Chairman of Dangote Group, has urged Nigeria’s elite to channel the money spent on luxury items like Rolls-Royce cars and private jets into building industries that boost economic growth and generate jobs.

Speaking with The PUNCH after a meeting with President Bola Tinubu at Aso Rock Villa on Saturday, Dangote lamented the culture of extravagant consumption, stressing that the nation’s development depends heavily on the responsibility of local investors.

“If you look at the Nigerian policy before, during the military, everybody from the president downwards used Peugeot 504. That was the highest. So, when a president is using 504, you cannot come as a commoner, as a businessman, or whoever you are, to be using Rolls-Royce,” he said.

Dangote criticised the proliferation of private jets at Nigerian airports, arguing that such wealth would be better invested in productive ventures.

“If you have money for a Rolls-Royce, you should go and put up an industry in your locality or anywhere in Nigeria where there is a need.

“It pains me when I go to the local airport, whether here or in Lagos, and even finding a parking space for your plane is impossible because everybody has a private jet. Those private jets could be in industries creating jobs,” he added.

Dangote emphasised that national development requires a strong focus on manufacturing and agriculture, supported by robust banking systems.

He also highlighted the urgent need for job creation, noting Nigeria’s population grows by 8.7 million babies every year, which demands significant investments in infrastructure and power.

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“Some people may not know the position of the country as we speak. Population growth is 8.7 million babies every year. So we need to deliver power, infrastructure, and other essentials,” he said.

The billionaire also framed tax compliance as both a civic duty and a partnership with the government.

“When you have a company, the number one shareholder is the government. We need an enabling environment from the government, and as corporate citizens, we must pay our taxes. I cannot cheat my partner. If I pay tax, children can go to school and hospitals can function. The government has huge demands, and we must do our part,” he added.

The businessman dismissed what he described as over-reliance on foreign investors, insisting that no external investor would commit to Nigeria without strong domestic participation.

He said, “We should stop calling for foreign investors. No foreign investor will come here unless domestic investors are active. Good policies, governance, and rule of law attract local investors, and foreign investors follow to partner or establish their own operations.

Dangote reiterated that industrialisation must be led by Nigerians, saying “We must industrialise our country. Nobody will do it but us. Once we industrialise, foreigners will partner with us or invest in Nigeria. We must remove both real and perceived risks to investment.”

The businessman also revealed that the Dangote Refinery would soon produce surplus volumes, with projections indicating that by February, it will supply 15–20 million litres more than Nigeria needs.

This will allow exports to neighbouring countries, reducing fuel scarcity across West Africa.

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“We are working to make Nigeria the refining hub of Africa. African countries import products, and we want to ensure that whatever we consume is produced locally,” he said.

Earlier in October, Dangote had also encouraged Nigerians to embrace homegrown products as a way to strengthen the economy and create jobs.

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NNPC serviced $3bn loan with N991bn crude – Report

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The Nigerian National Petroleum Company Limited has serviced part of its $3bn forward-sale loan from the African Export-Import Bank with crude oil worth N991bn in 2024, according to its 2024 financial statement report. The repayment was tied to Project Gazelle, a forward crude oil supply agreement signed in 2023.

On August 17, 2023, The PUNCH reported that the NNPC announced it had secured a $3.3bn emergency loan to repay crude oil obligations from Afreximbank. It explained that the loan would be used by the oil company to support the Federal Government in stabilising Nigeria’s exchange rate.

“The NNPC Ltd. and AFREXIM bank have jointly signed a commitment letter and Termsheet for an emergency $3bn crude oil repayment loan,” NNPC said in a statement.

“The signing, which took place today at the bank’s headquarters in Cairo, Egypt, will provide some immediate disbursement that will enable the NNPC Ltd. to support the Federal Government in its ongoing fiscal and monetary policy reforms aimed at stabilising the exchange rate market,” it added.

Under the deal, NNPC committed to deliver 90,000 barrels of crude oil per day from Production Sharing Contract assets to back a funding facility. According to the 2023 financial statement, a drawdown of $2.25bn had already been achieved by 31st December 2023, with principal repayment scheduled to begin in June 2024.

The funding carried an interest rate of 3-month LIBOR plus 6.5 per cent, with a 6 per cent margin and 0.5 per cent liquidity premium.

According to the 2024 financial statement, the drawdown on the facility had reached N4.9tn out of a total available N5.1tn, while N991bn worth of crude oil had been lifted in repayment, leaving an outstanding balance of N3.8tn at the end of 2024.

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The report read, “In December 2023, NNPC Limited entered into a forward sale agreement with Project Gazelle Funding Limited to supply 90,000 bbl. of crude oil per day from Production Sharing Contract Assets for the settlement of a 5-year N2.7tn funding.

“The funding was utilised by the company to finance an advance payment of future taxes and royalty obligations due to the federation on PSC assets managed by the Company on behalf of the Federation.

“As at 31st December 2024, a drawdown of N4.9tn has been achieved from the initial facility of N5.1tn. The interest rate for the facility is 3-month SOFA plus 6.5 per cent while the margin and Liquidity Premium of 0.5 per cent respectively. A total value of Crude Oil worth N991bn has been lifted with a balance of N3.8tn as at 31st December 2024.”

The repayment was made between June and December 2024. However, NNPC did not disclose the identity of the offtakers or exact delivery volumes fulfilled in 2024.

The Project Gazelle arrangement has become one of NNPC’s most significant forward-sale financing vehicles, following a trend of oil-backed loans designed to shore up government revenues, refinance legacy debts, and meet budgetary obligations amid limited fiscal buffers.

The PUNCH earlier reported that the NNPC Ltd is burdened with crude-backed loan obligations estimated at N8.07tn.

The liabilities stretch across multiple forward-sale and project-financing arrangements that are expected to be serviced through substantial crude oil and gas deliveries. The commitments have become a major pillar of NNPCL’s funding structure following years of fiscal pressure, volatile crude production, and declining upstream investment.

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Several of the facilities were used to refinance older debts, fund refinery rehabilitation, support cash flow, and meet government revenue obligations.

When assessed together, the company’s major crude-for-loan facilities—Eagle Export Funding (21,000 bpd), Project Yield (67,000 bpd), Project Leopard (35,000 bpd), and Project Gazelle (90,000 bpd)—represent a combined commitment of 213,000 barrels per day, in addition to separate gas-delivery obligations under the NLNG arrangement.

The volume equates to a sizeable share of Nigeria’s daily crude output, underscoring the long-term implications of these arrangements for government revenue, export allocation, and operational flexibility.

The PUNCH also reported that Nigeria’s gross profit from crude oil and gas sales plunged by N824.66bn in 2024 despite a rebound in oil production, according to figures from the Budget Implementation Report for the fourth quarter of 2024 released by the Budget Office of the Federation.

Data from the report revealed that gross profit from crude and gas sales fell to N1.08tn during the year, from N1.90tn in 2023, representing a 43.32 per cent decline.

The Chief Executive Officer of AHA Strategies and oil and gas expert, Mr Ademola Adigun, earlier linked Nigeria’s declining oil earnings to opaque crude-for-cash agreements and undisclosed loan repayments that have tied up part of the country’s crude output.

He said some of the government’s oil barrels were already committed to debt settlements and forward-sale contracts, reducing the actual volume that brought fresh revenue into the Federation Account.

Adigun said, “Some of our crude is already tied up in loan agreements. The problem is that Nigeria doesn’t know the full details of these transactions because there’s little transparency around them.”

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He explained that several crude-backed projects, such as Project Gazelle, were carried out without proper public disclosure or parliamentary scrutiny.

He added that the Nigeria Extractive Industries Transparency Initiative should strengthen its audits to determine how much of the country’s crude is being used for debt repayment or swap transactions.

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Yuletide: Dangote assures Nigerians of stable fuel supply

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Chairman of Dangote Group, Aliko Dangote, on Friday said Nigerians will no longer experience fuel queues during the Christmas and New Year seasons.

Briefing State House correspondents after meeting with President Bola Tinubu at the Aso Rock Villa, Abuja, Dangote said his refinery has formally notified the Nigerian Midstream and Downstream Petroleum Regulatory Authority of its readiness to deliver 50 million litres of Premium Motor Spirit daily, far above national consumption.

He said, “Historically, Nigeria has battled fuel queues since 1972. For the first time, we are eliminating those queues, not through imports but by producing locally.

“Even when we were servicing the refinery, there were no queues. I can assure you that queues are now history.”

Dangote stated that the refinery will soon produce surplus volumes, adding that by February, it will supply 15–20 million litres more than Nigeria needs.

This, he argued, will allow exports to neighbouring countries, reducing the incidence of fuel scarcity across West Africa.

The industrialist also disclosed that domestic manufacturers, especially in the plastics industry, will now enjoy reliable access to locally produced feedstock, ending years of reliance on imports estimated at $400m annually.

Dangote also announced an expansion programme that will raise refinery capacity to 1.4 million barrels per day by 2028, surpassing India’s Reliance refinery, the world’s largest, at 1.25 million barrels per day.

“We have already signed the necessary agreements.

“Construction piling begins before the end of January, and we will deliver on schedule,” he announced.

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He revealed plans to scale up the company’s urea production to 12 million tonnes annually, positioning Nigeria to overtake Russia and Qatar as the world’s leading producer.

“Our goal is to use our fertilizer company to supply the entire African continent,” Dangote said.

Dangote attributed the recent drop in petrol and diesel prices to increased competition and reduced smuggling.

“Prices are going down because we must compete with imports.

“Luckily, smuggling has dropped significantly, though not completely,” he explained.

He noted that the refinery business is a long-term national investment, saying, “We’re not here to recover $20 billion overnight.

“The legacy I want to leave is that whatever Nigerians need, fuel, fertiliser, power, we will be part of delivering it.”

Dangote further highlighted logistics constraints affecting Nigeria’s solid minerals sector, particularly the congestion of major ports.

“Apapa is full. Tin Can is full. Lekki is mainly for containers.

“You cannot export coal or copper if you have nowhere to ship from,” he noted.

To curb this, he explained that the Group is developing what would become West Africa’s largest deep-sea port at Olokola, expected to be completed in two to two-and-a-half years.

The Kano-born businessman expressed support for the Tinubu administration’s naira-for-crude initiative, describing it as a patriotic move to strengthen the economy, although he acknowledged pushback from international oil companies.

According to him, “It’s a teething problem, but it will be resolved, either through legislation or administrative action.”

On concerns about global competition, Dangote maintained that the refinery will thrive.

He said, “What we want is to make Nigeria the refining hub of Africa. All African countries import fuel. We want what we consume to be produced here.”

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He also endorsed the government’s Nigeria-first industrial policy and urged wealthy Nigerians to channel resources into productive investment rather than luxury spending.

“If you have money for a private jet, invest in industries and create jobs,” he stated, adding that domestic investors must drive industrialisation to attract foreign capital.

Dangote acknowledged past hurdles, policy instability, smuggling, and factory closures, but expressed optimism that the country is now on a stable path toward sustainable industrial growth.

“Domestic investors must lead the way. Once they do, foreign investors will follow.

“Nobody advertises a good restaurant; when the food is good, word spreads,” he explained.

He described his meeting with President Tinubu as a routine consultation on the economy and business environment, noting that it was “a very fruitful meeting.”

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