Reported by: Oahimire Omone Precious | Edited by: Oravbiere Osayomore Promise.
The Nigerian Automotive Manufacturers Association (NAMA) has issued a stark warning to the Federal Government, cautioning that the 2026 tariff reforms could undermine decades of investment in the country's automotive sector, turning Nigeria into a mere vehicle consumption market without a meaningful manufacturing economy. In a position paper submitted to the Minister of Industry, Trade and Investment, Dr Jumoke Oduwole, and copied to the National Automotive Design and Development Council (NADDC), NAMA argued that while the new fiscal measures promote trade liberalisation, they do not provide the level of industrial support required to sustain local vehicle assembly and component manufacturing. The association warned that premature market liberalisation could lead to increased vehicle imports, reduced local assembly volumes, lower factory capacity utilisation, and weaker incentives for investment in assembly plants and component manufacturing, including tyres, batteries, plastics, and automotive glass.
The 2026 Fiscal Policy Measures, which took effect on 1 July 2026, introduced significant tariff reductions aimed at lowering the cost of living and boosting key sectors. Under the new regime, import duties on fully built passenger vehicles were slashed from 70 per cent to 40 per cent, while the import levy on brand-new vehicles was reduced from 20 per cent to 10 per cent, and the levy on used vehicles was cut from 15 per cent to five per cent. Mass transit buses and electric vehicles were granted full duty exemption as part of a green tax initiative. Additionally, the government introduced a Green Tax Surcharge of two to four per cent on high-emission vehicles with engine capacities above 2,000cc, effective from 1 July 2026.
NAMA, however, expressed concern that the reduced duty gap between imported fully built vehicles and locally assembled units could erode the competitive advantage required for Nigeria's emerging automotive industry to grow. According to the association, the narrowing tariff differential reduces the protection local assemblers need to achieve economies of scale and deepen local content. “Nigeria’s automotive industry is still at an infant-to-intermediate stage. Affordability for consumers and protection for investments that create jobs are not mutually exclusive, and both objectives should progress together,” said Bawo Omagbitse, Chairman of NAMA. The association pointed to official Nigerian Ports Authority data showing that vehicle imports increased by 67 per cent year-on-year, rising from 35,262 units in the first quarter of 2025 to 58,870 units during the same period in 2026, a surge that NAMA said reflected importers' expectations of lower duties on fully built vehicles ahead of the implementation of the new fiscal measures.
NAMA emphasised that successful automotive economies such as Thailand, Morocco, South Africa, and China combined tariff protection with production incentives, supplier development programmes, export promotion, and infrastructure support before fully liberalising their automotive sectors. The association stressed that Nigeria should follow a similar sequenced approach. “Our request is simply that these reforms be sequenced with the industrial support measures that successful automotive economies established before opening their markets,” said Dr Harpreet Singh, Executive Director and Chief Executive Officer of NAMA. Reviewing Nigeria's automotive policy between 2014 and 2020, the association acknowledged that local content development and production capacity remained below expectations, largely due to the absence of legislation backing the Nigeria Automotive Industry Development Plan (NAIDP) and the resulting lack of long-term policy certainty for investors.
To strengthen the industry, NAMA proposed three priority measures: restoring a more substantial duty differential between imported and locally assembled vehicles, making consultation with NADDC and the Ministry mandatory before introducing future automotive fiscal policies, and urgently passing the NAIDP into law. The association also recommended production-linked incentives, the establishment of an automotive supplier development fund, priority foreign exchange access for industrial inputs, and dedicated energy and logistics support for manufacturers. “Nigeria risks becoming a major vehicle consumption market without developing into a significant automotive manufacturing hub,” NAMA warned. The association reaffirmed its readiness to work with the government to ensure that the country's automotive future balances market liberalisation with the industrial safeguards needed to protect local investment, create jobs, and deepen local content. As the 2026 tariff reforms take effect, the warning from auto makers serves as a critical reminder that trade liberalisation, without corresponding industrial policy, could threaten the viability of Nigeria's automotive industry and undermine the country's ambition to become a manufacturing hub rather than just a consumption market.
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