The Federal Government has unveiled plans to tap into Nigeria’s largely informal vehicle recycling market, projecting annual revenues of more than ₦150bn from 2026 as part of wide-ranging reforms to modernise the country’s automotive industry.
The initiative was disclosed by the National Automotive Design and Development Council (NADDC) in a statement issued on Sunday. Its Director-General, Joseph Osanipin, said the reforms would be driven by a comprehensive End-of-Life Vehicle (ELV) programme that has already received government approval.
Osanipin explained that the policy aims to formalise the recycling of vehicles that have reached the end of their useful lives, transforming what is currently an environmental and safety challenge into a significant economic opportunity. He noted that in many developed countries, vehicle owners contribute to disposal costs at the point of registration, ensuring that proper recycling is funded when the vehicle eventually becomes obsolete.
Nigeria’s model, he said, will follow a similar approach, with a modest fee introduced during vehicle registration to support environmentally sound disposal and recycling. While acknowledging that the policy may initially face public resistance, Osanipin stressed that it is essential for long-term sustainability.
He pointed out that Nigeria already has a thriving informal second-hand auto parts market, popularly known as the Belgian parts market, driven largely by concerns over the quality and durability of new components. Studies by the council, he said, indicate that more than 85 per cent of parts from end-of-life vehicles are reusable or recyclable, providing a strong foundation for a structured circular economy.
Beyond revenue generation, Osanipin said the ELV programme would create thousands of jobs across dismantling, refurbishing, logistics, and component resale value chains. He added that instead of abandoned vehicles cluttering roadsides, owners would have incentives to turn them in and recover value.
The announcement comes amid a rebound in Nigeria’s vehicle import market. Recent data show that the value of passenger vehicle imports rose to about ₦1.01tn in the first nine months of 2025, up from roughly ₦894bn in the same period last year, reflecting improved foreign exchange stability and renewed importer confidence. According to the National Bureau of Statistics, the recovery gained momentum in the second half of the year, with the third quarter recording a sharp increase that offset earlier slowdowns.
While the rebound highlights the resilience of Nigeria’s auto market—particularly the fairly used (“Tokunbo”) segment—it also underscores persistent challenges such as high landing costs, currency risks, and heavy dependence on imports.
To address these issues, the NADDC plans to introduce mandatory pre-export certification for all used vehicles imported into Nigeria from 2026. The measure is designed to prevent the dumping of rusted and end-of-life vehicles in the country. Osanipin said Nigeria’s lack of such a requirement has made it an attractive destination for exporters seeking to offload unroadworthy vehicles, adding that certification costs would be borne by exporters, not Nigerian consumers.
In parallel, the council is pushing to future-proof the sector through vehicle conversion initiatives, including transitions from petrol and diesel engines to electric vehicles and compressed natural gas (CNG), in line with the National Automotive Industry Development Plan (NAIDP). Osanipin said extensive training programmes on EV technology, alternative fuels, and vehicle conversion are already underway for regulators and industry players.
He revealed that National Occupational Standards for EV maintenance and CNG retrofitting have been developed, with structured certification programmes expected to begin by 2026. Nigerian engineers and students, he added, are also making progress in local vehicle design through collaborations involving universities and private sector partners.
Osanipin stressed that component manufacturing remains the true value driver in the automotive industry, noting that Nigeria spends more annually on items such as tyres, brake pads, filters, and batteries than on importing complete vehicles. The council is engaging stakeholders to tackle infrastructure, financing, and policy constraints facing local manufacturers, especially as Nigeria positions itself to benefit from the African Continental Free Trade Area.
He also disclosed plans to strengthen the legal framework for the sector by transforming the NAIDP into an Act of Parliament, with a draft Auto Industry Bill set to be presented to the National Assembly.
Acknowledging that some reforms may face resistance, Osanipin appealed to the media to help communicate the long-term benefits to the public, describing 2026 as a turning point for Nigeria’s automotive industry transformation.
