Nigeria’s Used Vehicle Imports Plummet 65.8% in 2024 Amid Economic Hardship and Soaring Import Costs

Nigeria’s used vehicle import sector has recorded a drastic decline as economic hardship continues to erode consumer purchasing power, and rising import costs make vehicle ownership increasingly out of reach for many Nigerians.

Data from the National Bureau of Statistics (NBS) reveals that importation of used vehicles with diesel or semi-diesel engines, of cylinder capacity 2500cc, plunged by 65.8 percent year-on-year (YoY) to N354.8 billion in 2024, down from N1.04 trillion in 2023.

The massive decline underscores the far-reaching impact of Nigeria’s economic downturn, which has left citizens grappling with soaring inflation, currency devaluation, and job losses.

Middle-Class Erosion and the Collapse of Nigeria’s Used Vehicle Market

The Nigerian middle class, which historically formed the backbone of the used car market, has been significantly depleted since 2015 due to a series of economic crises, multiple recessions, and policy missteps. Between 2015 and 2025, Nigeria faced severe foreign exchange instability, runaway inflation, and stagnating incomes, eroding the financial capacity of middle-income earners to afford even second-hand vehicles.

For years, Nigeria relied heavily on imports of Tokunbo (foreign-used) vehicles, as the local automobile industry struggled with production challenges. However, as the economy worsened, many middle-class professionals who once could afford imported cars have been pushed into poverty, dramatically reducing demand. Today, only the wealthiest Nigerians can afford new cars, while the lower-income segments rely on decade-old vehicles or resort to alternative transport options such as motorcycles and public transit.

A breakdown of NBS Foreign Trade in Goods Statistics for 2024 reflects this sharp decline in used vehicle imports:

• No recorded vehicle imports in Q1’24, suggesting a near-total collapse of the market at the start of the year.
• Q2’24 saw a partial recovery, with N110.54 billion worth of used vehicle imports recorded.
• In Q3’24, the figure grew by 11.9 percent quarter-on-quarter (QoQ) to N123.77 billion.
• However, Q4’24 witnessed a 2.6 percent decline in QoQ to N120.49 billion, highlighting the volatility of the market.

Import Duties and Trade Barriers: Customs’ Role in the Economic Downturn

Against the backdrop of the massive decline, many believe it is not solely a reflection of economic distress but also the result of the government’s persistent increase in import duties, levies, and other taxes that have made vehicle importation prohibitively expensive.

Economic analysts have repeatedly warned that the Nigerian Customs Service (NCS) is contributing to the country’s economic woes by prioritizing revenue generation over trade facilitation. Customs duties on imported vehicles have been steadily increasing, with multiple layers of taxation making car imports unaffordable for both dealers and individual buyers.

“The Nigerian customs is under no obligation to adopt the [official] NAFEX rate. Using N1,637/$1 creates revenues for Customs and translates to imported inflation to Nigerian consumers,” economist Kalu Aja said last year. “For a limited time, adopt $1 to N200 as the exchange rate; this means imports to Nigeria will drop in price.”

In 2023, the Ports and Terminal Multipurpose Limited (PTML), one of Nigeria’s busiest vehicle import terminals, blamed high import duties and excessive taxation for a 60 percent drop in vehicle importation in H1 2024. This was echoed by industry stakeholders, who noted that the cost of clearing a used vehicle at the ports had more than tripled in the past five years, largely due to the depreciating naira and ever-rising levies imposed by customs.

Many economists have noted that Customs is meant to facilitate trade, not strangle it, warning that turning the ports into cash cows and forcing businesses to pay exorbitant duties only drive the market further into decline.

Government’s Last-Minute Efforts to Revive Vehicle Imports

In a belated attempt to mitigate the crisis, the Federal Government recently announced a 90-day window for regularizing import duties on specific categories of vehicles. The NCS confirmed that vehicle owners would be allowed to pay outstanding duties within this period to avoid sanctions.

Abdullahi Maiwada, the National Public Relations Officer of the NCS, described the initiative as a “proactive move to enhance compliance and streamline import processes.” He explained that vehicles would be assessed using the Vehicle Identification Number (VIN) valuation method, with importers required to pay both duties and a 25 percent penalty in accordance with import guidelines.

While the waiver program offers temporary relief, experts argue that it does little to address the structural problems within Nigeria’s import system.