The Federal Government is moving to formalise Nigeria’s largely informal vehicle recycling space, with projections showing the sector could generate more than N150bn annually from 2026 as part of broader efforts to overhaul the automotive industry
The National Automotive Design and Development Council made this known in a statement on Sunday, quoting its Director-General, Joseph Osanipin, who said the initiative would be anchored on an End-of-Life Vehicle programme that has already received approval.
Osanipin said the policy would regulate the disposal and recycling of vehicles that are no longer roadworthy, transforming what has long been an environmental and safety challenge into a structured economic activity.
“In developed countries, when you buy a new vehicle, during registration, you make a payment towards the disposal of that vehicle when it reaches the end of its life. When it gets to the end of its life, somebody has to be responsible for the disposal.”
He explained that Nigeria plans to adopt a similar framework, introducing a small levy at the point of vehicle registration to fund proper disposal and recycling. He admitted the idea may not be immediately popular but insisted it was necessary for sustainability.
Osanipin pointed out that Nigeria already runs a strong informal market for used vehicle components, widely known as the Belgian parts market, largely driven by perceptions of durability and quality compared to new parts.
According to studies by the council, more than 85 per cent of components from end-of-life vehicles can still be reused or recycled, offering a solid base for a circular economy.
“If someone has an alternative, instead of abandoning vehicles by the roadside, you can turn them in and still make something out of them. The circular economy associated with this will be worth billions of naira every year, if well managed.”
He added that the recycling value chain would also create thousands of jobs across dismantling, refurbishment, transportation and component resale.
The announcement comes as Nigeria’s vehicle import market shows signs of recovery. Recent reports indicate that passenger vehicle imports rose to about N1.01tn in the first nine months of 2025, compared to roughly N894bn during the same period in 2024, reflecting renewed demand amid improved foreign exchange stability.
Figures from the National Bureau of Statistics showed that the rebound gained momentum in the third quarter of the year, offsetting slower activity earlier in 2025. While the resurgence highlights the resilience of the “Tokunbo” segment, it also exposes lingering issues such as high import costs, currency risks and dependence on foreign supply.
As part of ongoing reforms, the council plans to enforce mandatory pre-export certification for all used vehicles entering Nigeria from 2026. The move is aimed at stopping the influx of rusted and end-of-life vehicles into the country.
Osanipin said Nigeria’s lack of such requirements had made it attractive to exporters seeking to dispose of unroadworthy vehicles.
“We will ensure that importers are held responsible so that whatever you are buying, you know what you are buying.”
He added that exporters, not Nigerian buyers, would bear the cost of certification.
In addition, the council is pushing vehicle conversion from petrol and diesel to electric power and compressed natural gas in line with the National Automotive Industry Development Plan. Osanipin said extensive training programmes had already begun for regulators and industry operators.
“Capacity building is one of the major pillars of the NAIDP. We have carried out training on vehicle conversion from PMS and diesel to CNG, as well as on electric vehicles.”
He disclosed that National Occupational Standards for EV maintenance and CNG retrofitting had been developed, with certification programmes expected to roll out by 2026.
Osanipin also highlighted progress in local vehicle design, citing projects involving tricycles, buses and electric shuttle buses developed with 12 universities and private sector partners.
“We want what is taught in our institutions to reflect industry realities. Producing even a few world-class auto engineers locally will have a significant impact on the economy.”
He stressed that component manufacturing remains the biggest value driver in the auto sector, noting that Nigeria spends more on tyres, brake pads, filters and batteries than on importing fully built vehicles.
The council, he said, is working with stakeholders to tackle infrastructure, financing and policy challenges affecting component manufacturers, particularly as Nigeria positions itself within the African Continental Free Trade Area.
Osanipin also revealed plans to back the automotive policy with legislation, saying a draft Auto Industry Bill would soon be sent to the National Assembly.
“Investment in the auto sector is huge. They will need an Act.”
While acknowledging that resistance is likely, he appealed to the media to help communicate the reforms, describing 2026 as a turning point for Nigeria’s automotive industry.
“When the pushback comes, we need you to explain to Nigerians what we are trying to do and why.”
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