The Federal Government has announced plans to tap into Nigeria’s largely informal vehicle recycling market, projecting annual revenues of over N150bn from 2026 as part of sweeping reforms to modernise the country’s automotive industry.
The National Automotive Design and Development Council disclosed this in a statement issued on Sunday, with its Director-General, Joseph Osanipin, stating that the initiative would be driven by a comprehensive End-of-Life Vehicle programme already approved for implementation.
According to Osanipin, the policy will formalise the recycling of vehicles that have reached the end of their useful lives, transforming what is currently an environmental and safety burden into a major economic opportunity.
He explained that in developed countries, buyers of new vehicles pay a fee during registration that covers the eventual disposal of the vehicle when it reaches the end of its life, ensuring that responsibility for disposal is clearly assigned.
Osanipin said Nigeria’s programme would follow a similar model, requiring a modest fee at the point of vehicle registration to fund environmentally sound disposal and recycling. He acknowledged that the policy may initially face public resistance.
He noted that Nigeria already has a thriving informal second-hand auto parts market, commonly known as the Belgian parts market, largely driven by concerns about the durability and quality of new parts.
Studies conducted by the council, according to Osanipin, show that more than 85 per cent of components from end-of-life vehicles remain reusable or recyclable, providing a strong foundation for a formal circular economy.
He said that rather than abandoning vehicles by the roadside, owners would have the option to turn them in and still derive value, adding that a well-managed circular economy could generate billions of naira annually.
Beyond revenue generation, Osanipin revealed that the recycling ecosystem would create thousands of jobs across dismantling, refurbishing, logistics and component resale segments.
The announcement comes amid a rebound in Nigeria’s vehicle import market this year. A recent report by The PUNCH showed that the value of passenger motor car imports rose to about N1.01tn in the first nine months of 2025, up from roughly N894bn during the same period in 2024. This increase signals renewed demand as foreign exchange market stability improves and importer confidence returns.
Data from the National Bureau of Statistics indicated that the recovery gained momentum in the second half of the year, with the third quarter recording a sharp rise in import value that offset weaker activity earlier in the year.
The rebound highlights the resilience of Nigeria’s auto market, particularly the fairly used, or Tokunbo, segment, while also underscoring persistent challenges such as high landing costs, currency exposure and structural dependence on imports.
As part of the reforms, the NADDC will introduce mandatory pre-export certification for all used vehicles imported into Nigeria from 2026. The measure is aimed at preventing the dumping of rusted and end-of-life vehicles into the country.
Osanipin said Nigeria is currently one of the few African countries without such a requirement, making it an attractive destination for exporters seeking to offload unroadworthy vehicles.
He recalled a meeting with a foreign exporter who admitted to shipping eight containers of end-of-life vehicles to Nigeria because it offered the highest profit.
Osanipin said importers would be held accountable so buyers clearly understand what they are purchasing, adding that the cost of certification would be borne by exporters rather than Nigerian consumers.
He also announced plans to convert petrol and diesel-powered vehicles to electric vehicles and compressed natural gas in line with the National Automotive Industry Development Plan.
According to him, the council has begun extensive training programmes on EV technology, vehicle conversion and alternative fuel systems for regulators and industry players.
He stated that capacity building is a major pillar of the NAIDP, noting that training has already been conducted on converting vehicles from petrol and diesel to CNG, as well as on electric vehicles.
Osanipin disclosed that the council has developed National Occupational Standards for EV maintenance and CNG retrofitting, with structured certification programmes expected to commence by 2026.
He added that Nigerian engineers and students are making significant progress in local vehicle design, citing projects involving tricycles, buses and electric campus shuttle buses developed in collaboration with 12 universities and private sector partners.
Osanipin said aligning academic training with industry realities would have a significant economic impact, even if only a small number of world-class auto engineers are produced locally.
He further noted that component manufacturing is the real value driver in the automotive sector, pointing out that Nigeria spends more annually on tyres, brake pads, filters and batteries than on importing fully built vehicles.
The council, he said, is engaging stakeholders to tackle infrastructure, financing and policy challenges facing component manufacturers, particularly as Nigeria positions itself to benefit from the African Continental Free Trade Area.
Osanipin also revealed plans to transform the NAIDP from a policy document into an Act of Parliament, stating that a draft Auto Industry Bill would soon be presented to the National Assembly.
He said investment in the auto sector is substantial and requires legal backing through legislation.
While acknowledging that some of the reforms may face resistance, Osanipin appealed to the media to help explain the policies to the public.
He urged journalists to support public understanding when opposition arises, describing 2026 as a pivotal year for transforming Nigeria’s automotive industry.
Since assuming office, President Bola Tinubu has introduced various taxes, which many Nigerians have criticised as burdensome. However, the President has maintained that the tax reforms are necessary to secure the country’s future.
