Reported by Ariajegbe Sylvia Esezobor
The Federal Government has issued a sweeping directive requiring all Ministries, Departments and Agencies to procure vehicles exclusively from licensed local assemblers or their authorised retailers, in a major escalation of the Nigeria First Policy aimed at forcing government spending into the domestic automotive industry and reducing the country’s heavy dependence on imported vehicles.
The directive, announced at a joint press briefing in Abuja on Friday by the Bureau of Public Procurement and the National Automotive Design and Development Council, states that no ministry, department or agency may procure a foreign-assembled vehicle unless it explicitly proves the absence of a domestic alternative and obtains direct presidential clearance. Every vehicle supplied to the government must carry a traceable Vehicle Identification Number verified through the NADDC, and any supply outside licensed local assembly lines will attract immediate regulatory sanctions, including blacklisting and licence revocation.
NADDC Director-General Oluwemimo Joseph Osanipin said the policy represented a fundamental shift in how government procures vehicles. “We are fundamentally shifting the Nigeria First Policy,” he said. “All vehicles procured by ministries, departments and agencies, including project utility vehicles, must be sourced exclusively from licensed local assemblers or their authorised retailers.” BPP Director-General Adebowale Adedokun said the policy had moved from the formulation stage to implementation, providing a more predictable environment for investors. He said concerns about policy instability had previously discouraged investment in the automotive industry, and that the government’s commitment to prioritising locally made products should give investors greater confidence.
The directive builds on earlier circulars issued by the Secretary to the Government of the Federation in May 2026, which directed MDAs to give preference to locally assembled vehicles. The BPP has also mandated that all procuring entities compile and submit details of every vehicle in their pools from 2020 to date, including date of purchase, purchase price, brand, model, VIN, evidence of payment and current status. The records must be submitted through the Automobile Procurement Records Submission platform, and quarterly procurement reports must include an itemised breakdown of automotive purchases detailing local content compliance. Failure to adhere will result in the rejection of procurement approval requests and sanctions against non-compliant accounting officers.
The policy is intended to create a dependable market for domestic manufacturers. Nigeria’s assembly plants have an annual installed capacity of approximately 370,520 vehicles, with nearly 40 licensed assembly plants operating across the country. However, actual output hovers around five per cent of capacity, with plants operating well below optimal efficiency due to low patronage, grey imports and macroeconomic pressures. More than 85 to 90 per cent of Nigeria’s annual vehicle demand is met by imported used vehicles, commonly known as Tokunbo. The country needs about 40 million vehicles to adequately serve its population of over 200 million, against the estimated 12 million to 14 million currently on the roads. The government is targeting locally assembled vehicles to meet about 80 per cent of national demand, with annual vehicle procurement projected at three million units.
The policy has been welcomed by local assemblers. Oluwatobi Ajayi, CEO of Nord Automobile, described the development as “very good news” for the automotive industry. He said the directive effectively makes it a criminal offence for procurement directors to buy vehicles not made in Nigeria, and that VINs must be traced to local production. Bawo Omagbitse, Chairman of the Nigeria Automotive Manufacturers Association, said the policy could reduce investment risks and accelerate local content development, noting that the capital-intensive nature of the industry and concerns about policy stability had discouraged potential investors. “What we are seeing today is a big departure,” he said.
The directive is not without challenges. NAMA has warned that the narrower duty differential between imported fully built units and locally assembled vehicles under the 2026 tariff reforms could erode decades of effort to build the industry. The association said premature liberalisation could increase import penetration, lower assembly volumes and capacity utilisation. Industry stakeholders have also identified high interest rates, foreign exchange volatility, poor road networks, unreliable electricity supply and limited access to the N250 billion auto fund as persistent obstacles. The NADDC has called for the establishment of a National Automotive Credit Guarantee Fund to reduce lending risks and make locally assembled vehicles more affordable, noting that fewer than five per cent of vehicle buyers currently have access to formal retail credit.
The policy is also designed to prepare Nigerian manufacturers for the African Continental Free Trade Area, which requires evidence of 40 per cent local content under its rules of origin. Osanipin said the government expected assemblers to transition from Semi-Knocked-Down production to Completely-Knocked-Down assembly, which requires greater local content. The NADDC would work with the BPP to monitor compliance and track manufacturers’ investments, employment and production growth.
The political context of the directive is significant. The 2027 general elections are less than four months away, with the presidential and National Assembly elections scheduled for January 16, and the governorship and state assembly elections for February 6. President Bola Ahmed Tinubu is seeking a second term on the All Progressives Congress platform, while former Vice President Atiku Abubakar of the African Democratic Congress, former Anambra Governor Peter Obi of the Nigeria Democratic Congress and Oyo State Governor Seyi Makinde of the Allied Peoples Movement are among the major challengers. The Nigeria First Policy is a centrepiece of the administration’s economic diversification agenda, and the vehicle procurement directive is one of its most concrete expressions. Critics have questioned whether the policy can be effectively enforced given the industry’s capacity constraints, but the government has signalled its determination to prioritise domestic production regardless of cost. As Adedokun put it, the Bureau of Public Procurement Act 2007 empowers the agency to prioritise local businesses even where locally produced goods cost more than imported alternatives. The coming months will determine whether the directive translates into increased patronage for local assemblers and whether the industry can scale up to meet the demand it has long been promised.
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