Nigeria Must Build Domestic Used-Vehicle Market, Reduce Tokunbo Dependence — NADDC
The National Automotive Design and Development Council (NADDC) has called for the development of a strong domestic used-vehicle market to reduce Nigeria’s dependence on imported second-hand vehicles, popularly known as tokunbo.
The Director-General of the council, Otunba Oluwemimo Joseph Osanipin, said Nigeria should develop a system where vehicles purchased and used locally can be resold and circulated among Nigerians over their useful lifespan.
Osanipin, who spoke at the NADDC headquarters in Abuja, said used vehicles were not inherently problematic, but argued that the country’s excessive reliance on vehicles imported from other countries was a major challenge to the growth of Nigeria’s automotive industry.
According to him, Nigeria spends significant foreign exchange importing hundreds of thousands of used vehicles annually, many of which arrive in poor condition.
He said the dominance of imported used vehicles over locally assembled and manufactured vehicles was also discouraging investment in the domestic automotive sector.
The NADDC boss identified three major challenges confronting the industry: inadequate legislation and policy stability, lack of consumer credit and dependence on imported used vehicles.
He stressed that the automotive industry required huge capital investment and long-term planning, making a stable policy environment essential.
Osanipin said the council was working through the Nigerian Automotive Industry Development Plan (NAIDP) to provide greater certainty for investors and protect long-term investments in the sector.
He disclosed that the NADDC had prepared a new draft of the NAIDP, which would undergo further consultations with industry stakeholders before being forwarded to the Ministry of Justice.
Consumer credit
Osanipin also identified limited access to affordable consumer credit as another major obstacle to the development of Nigeria’s automotive market.
He noted that in advanced automotive economies, specialised vehicle-financing companies play a major role in helping consumers acquire vehicles, unlike Nigeria where many buyers are expected to make outright payments.
According to him, high commercial lending rates in Nigeria make it difficult for consumers to finance vehicle purchases.
He said the NADDC had therefore been working with the Nigerian Consumer Credit Corporation (CreditCorp) to increase the availability of financing for vehicle purchases.
Osanipin disclosed that an initial N20 billion allocation was being devoted to automobile financing, with expectations of additional funding.
NADDC launches vehicle-history system
On the tokunbo challenge, Osanipin said Nigeria needed to create an internal cycle in which vehicles purchased new in the country could eventually become used vehicles and be sold to subsequent owners.
He explained that a vehicle could be purchased new, used for several years and resold to another Nigerian, who could later sell it to a third owner.
According to him, such a system would make vehicle ownership more accessible while keeping more economic value within the country.
He, however, said the development of such a market would require reliable information on the history and condition of vehicles.
Osanipin disclosed that the NADDC had launched the National Automotive Repository Platform (NARP) in Lagos to address the information gap.
He said the platform would be integrated with the National Vehicle Registry (VREG) of the Federal Ministry of Finance and the Nigeria Customs Service platform.
The system, he explained, would enable the authorities to capture information on vehicles from the point of entry and registration, while providing records of ownership, maintenance and accident history.
Local components key to industry
The NADDC DG also identified local production of automotive components as a critical part of Nigeria’s industrialisation strategy.
He described component manufacturing as the “engine room” of the automotive industry, noting that it could generate significantly more employment than vehicle assembly.
Osanipin said the council had visited several states, including Lagos and Anambra, to identify businesses and industrial clusters with the capacity to manufacture automotive components locally.
He cited a manufacturing plant in Emene, Enugu State, capable of producing plastic components for automobiles and other uses, as an example of the capacity available within the country.
He also said the council had launched a motorcycle parts deletion programme aimed at increasing the local production of motorcycle and tricycle components.
According to him, tyres and most motorcycle parts, apart from engines, could be produced locally.
Nigeria must leverage AfCFTA
Osanipin stressed that Nigeria must accelerate its local-content drive to take advantage of opportunities created by the African Continental Free Trade Area (AfCFTA).
He explained that the 40 per cent rule of origin requires products to meet a specified local-content threshold to qualify for preferential movement across African markets without trade barriers.
He said the council was therefore encouraging local manufacturers to expand their production capacity.
The NADDC boss also highlighted the need to strengthen skills development and certification in the automotive sector.
He said Nigeria had many skilled automotive technicians and artisans whose expertise was not formally certified, limiting their ability to secure appropriate recognition and remuneration.
Osanipin said building a competitive automotive industry would require more than assembling vehicles locally.
He listed stable policies, affordable vehicle financing, a reliable domestic used-vehicle market, vehicle-history data, local component manufacturing, increased local content and skills certification as essential elements of a sustainable automotive ecosystem.
He said the objective was to move Nigeria from being largely a consumer and importer of vehicles and components to becoming a major automotive manufacturing hub.
Under such a system, he added, vehicles produced or assembled in Nigeria could remain within the domestic economy for several years, passing from one owner to another while creating jobs and economic value.
This, he said, would gradually reduce Nigeria’s dependence on imported used vehicles and strengthen the country’s automotive industry.
