Connect with us

Business

Vehicle imports slide 10% on weak consumer spending

Published

on

The automobile market is facing one of its most difficult periods in recent years, as data from the National Bureau of Statistics show that passenger car importation has continued to decline sharply, reflecting a broader collapse in consumer purchasing power and business activity across the transport sector.

According to the National Bureau of Statistics’ foreign trade data, passenger motor car imports in the first six months of 2025 stood at N479.26bn, a 9.69 per cent drop from the N530.67bn recorded in the same period of 2024. The downward trend is consistent with the previous year’s figures, when the total import value fell from N1.47tn in 2023 to N1.26tn in 2024, representing a 14.29 per cent decline.

A quarterly breakdown of the data showed that in Q1 2025, the country imported passenger vehicles worth N224.58bn, while Q2 2025 recorded N254.67bn. By contrast, Q1 2024 saw imports valued at N238.73bn, and Q2 2024 stood at N291.93bn, underscoring the consistent slowdown in vehicle importation since 2023.

Dealers and analysts told The PUNCH in phone interviews that the trend is not a surprise, given the persistent foreign exchange challenges, high import duties, and the low purchasing power of Nigerians, which have combined to make car ownership increasingly unaffordable for both households and businesses.

Dealers hit hard

A vehicle sales expert, Cletus Aregbesola, said the high cost of the dollar and steep customs tariffs remain the biggest reasons for the continued fall in car imports.

“You cannot separate Nigeria from the global market. Even though the dollar has stabilised, it is still high. So by the time you bring in a car, you already know how much you will pay your OEMs, and that reflects on the final price,” Aregbesola said.

He noted that import duties have become unbearable for dealers. “Custom duty is so high for both ‘Tokunbo’ (fairly used) and new cars. You’re paying between 75 and almost 100 per cent on the car. The tariff used to be lower for Tokunbo cars, but now both categories are almost the same,” he explained.

Aregbesola noted that this has forced many potential buyers to postpone new purchases and focus instead on maintaining their existing vehicles. “People are no longer buying new cars. They prefer to maintain what they have. It doesn’t make sense to sell your car at N3m only to buy a new one at N12m,” the car expert added.

He added that the surge in fuel costs has further discouraged ownership. “Fuelling is also a major factor. With the price of petrol rising, people now ask themselves if they can sustain the cars they own. Most families are not thinking about cars now; they’re focused on feeding, rent, and school fees.”

See also  Trump threatens to end cooking oil purchases from China

Worse, the decline in car importation has hit the profitability of auto businesses, leading to layoffs and restructuring. Aregbesola revealed that “many auto companies that used to sell 2,000 or 3,000 units annually are now struggling to sell 500. Corporate fleet purchases, which used to support bulk sales, are now rare. When those orders don’t come, the businesses struggle.”

He said that, to survive, dealers have begun embracing Chinese car brands, which are relatively cheaper compared to European or American vehicles.

“The market is now pro-Chinese vehicles. Just three years ago, there were very few on Nigerian roads, but today that’s what companies and even some government agencies can afford. Some go for N30m to N40m, while equivalent European models cost over N100m,” he noted.

He added that the focus on cheaper brands has helped businesses “cushion the impact” of falling demand, though profits remain thin.

Many car dealers have diversified into after-sales and maintenance services to stay afloat, given that more Nigerians are choosing to repair rather than replace their cars. “We now emphasise after-sales. That’s where most of the income comes from,” Aregbesola maintained.

Some companies have also reduced their workforce. “You can’t run away from it. You have to reshuffle staff, reduce your load, and become leaner to survive,” he said.

Meanwhile, the President of the Importers Association of Nigeria, Kingsley Chikezie, after a failed attempt to contact the car import group of his association, corroborated the challenges faced by car importers. While the IMAN president noted that he is “not involved in the importation of cars”, he confirmed that “there are a lot of issues in car importation in Nigeria.”

Chikezie said, “The income per capita in Nigeria is so small that somebody cannot save up N6m to N10m to go and buy a Corolla car.”

FX, tariffs choke demand

Economist and former President of the Chartered Institute of Bankers of Nigeria, Prof Segun Ajibola, said the continued decline in car imports reflects the harsh realities of the economy.

“There is a decline in the value of our local currency, which has jacked up the landing costs of imported goods. Since there is a limit to the purchasing power of end users, most car users now rely more on repairs and refurbishing old cars instead of buying new ones,” he said.

Ajibola noted that the import data likely does not include the large number of Tokunbo cars that enter the country through unofficial channels. “We are all aware that there is large-scale smuggling of Tokunbo cars into Nigeria. Those who evade customs duties can sell at cheaper prices, which further distorts the market,” he explained.

See also  PHOTOS: Agege Food Hub To Strengthen Lagos Food Distribution Network, Says Gov. Sanwo-Olu

He observed that corporate institutions have also cut back on new vehicle purchases. “Many companies that used to buy new cars for staff or management now settle for Tokunbo vehicles. Maintenance and refurbishment businesses are booming because people are trying to stay in motion without buying new cars.”

Despite government initiatives like the Renewed Hope Automobile Credit Fund and the Nigeria Consumer Credit Corporation, stakeholders say access to affordable credit remains a major problem.

Ajibola said, “If they afford people a credit line to buy cars, can they pay back? Why will I take an N50m or N100m loan in Nigeria today just to buy a car? I would rather look for a Tokunbo that costs N10m or N20m. So affordability is still a big issue.”

He added that the nature of vehicles as “movable assets” also discourages lenders. “A car can disappear, have an accident, or lose value fast. So there’s a limit to how far banks and credit institutions can go,” he said.

He argued that Nigeria must develop its own local automobile industry to reduce reliance on imports. India has its own brands. Korea has its own mix. “Why should Nigeria, after 65 years of independence, still depend on foreign countries for cars?” the economist queried.

Local production

While the Federal Government has made moves to stimulate local production through credit schemes and assembly plant incentives, stakeholders say progress remains slow.

The Centre for the Promotion of Private Enterprise, in a policy brief on Nigeria’s 2025 second-quarter Gross Domestic Product report, listed motor vehicle assembly among the “challenged and recessionary sectors”.

According to CPPE Director Muda Yusuf, “The motor vehicle assembly sector reversed Q1 gains to contract by 1.5 per cent, reflecting import pressure and weak demand. Sustained policy support, including government procurement of locally assembled vehicles, is essential for revival.”

An earlier commentary made available to The PUNCH by the Executive Director of the Motorcycle Manufacturers Association of Nigeria, Lambert Ekewuba, confirmed that local production was below the optimal level.

Ekewuba had called for the Federal Government to partner with the Original Equipment Manufacturers to accomplish a successful component deletion programme, which would pave the way for a lucrative local auto manufacturing sector.

He said, “Nigerian motorcycle manufacturers are not OEMs. That is, we don’t have the original manufacturing equipment. We are not the owners of the motorcycles. You must convince the owners to establish their technology here in Nigeria.”

Meanwhile, CPPE director Yusuf explained that only stable policies can address the challenges facing the sector, ranging from smuggling to high energy costs. “Without consistent government patronage and stable policies, these assembly plants will continue to struggle,” he warned.

See also  Nigeria’s exports fall 5.3% in Q4 2025, imports rise – NBS

The Federal Government, through the National Automotive Design and Development Council and CrediCorp, launched initiatives to ease vehicle ownership and stimulate local production. The PUNCH reported in 2024 that both agencies unveiled an N20bn consumer credit fund to help Nigerians purchase locally assembled vehicles.

The initiative, announced during a signing ceremony with nine local manufacturers, including Innoson, Nord, CIG GAC, PAN, Mikano, Jets, NEV, and DAG, was intended to reduce import dependency and support local assemblers.

By March 2025, CrediCorp expanded the scheme to a N100bn credit initiative aimed at making vehicle ownership more accessible. The PUNCH reported the CrediCorp Chief Executive Officer, Uzoma Nwagba, said, “Our goal is to expand access to consumer credit for Nigerians to improve their quality of life. This includes financing for vehicles, mobility, solar panels, and home improvements.”

The impact of these programmes is yet to be felt in the market. The PUNCH discovered that most Nigerians are unable to meet the repayment conditions, even if they are available. Thus, the market remains dry.

Dealers and economists agree that the decline in car imports is not only a reflection of weak demand but also a sign of deeper structural challenges in Nigeria’s economy, high inflation, rising taxes, and limited credit access.

Aregbesola said the government must rethink its import and tariff policies if it wants to revive the sector. “The tariff on vehicles needs to come down. Even local assemblers are not benefiting because the cost of setting up an assembly plant is still high,” he said.

He also urged the government to strengthen local production through consistent incentives and power supply. “If the government buys locally assembled vehicles for official use, it will create the demand that keeps factories alive.”

Ajibola, however, cautioned that no short-term measure will fix the situation without addressing purchasing power. “Until the income level of Nigerians improves, no credit scheme or tariff reduction will make car ownership easier. People simply cannot afford it,” he said.

With the average new vehicle now costing between N40m and N100m, and used cars between N10m and N25m, the dream of car ownership is fast slipping beyond the reach of most Nigerians.

As the data show, the sector’s contraction is not just a statistical trend; it represents the growing economic strain facing households and the fading shine of a once vibrant automobile trade.

punch.ng

FOLLOW US ON:

FACEBOOK

TWITTER

PINTEREST

TIKTOK

YOUTUBE

LINKEDIN

TUMBLR

INSTAGRAM

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

NAFDAC destroys N8bn products, targets sachet alcohol in N’Central

Published

on

The National Agency for Food and Drug Administration and Control (NAFDAC) has confiscated and destroyed unwholesome, banned, fake and adulterated products worth more than N8 billion in the North-Central states.

Speaking during the destruction ceremony on Thursday in Lafia, the Nasarawa State capital, the Director-General of NAFDAC, Prof. Mojisola Adeyeye, said the products were seized from manufacturing outfits, sales outlets, markets and motor parks across the zone.

The DG, who was represented by a Deputy Director of NAFDAC in the zone, Joseph Edor, said most of the confiscated products were banned alcoholic beverages in small volumes of less than 200 ml (20 cl).

According to her, NAFDAC was established by Decree No. 19 of 1993, as amended, with the mandate to protect and promote public health by ensuring that only quality, efficacious and regulated products are manufactured, imported, distributed and sold in Nigeria.

She explained that the agency banned alcoholic beverages in sachets and glass bottles of less than 200ml due to their availability, affordability and portability, which have made them easily abused by youths and underage schoolchildren.

“Research has shown that early exposure to alcohol affects the brain and other vital organs such as the liver and kidneys.

“It stymies the brain, resulting in mental retardation, brain damage, poor performance of pupils in school, low productivity and several types of illnesses,” she said.

The DG said the ban and subsequent raids were based on these abuses, addiction and adverse health effects, while other seized items included expired, fake and unwholesome food, drugs and cosmetics.

“It is in the course of carrying out these activities that this heap of unwholesome, banned, fake and adulterated products worth about eight billion naira was confiscated from manufacturing outfits, sales outlets, markets and motor parks.

See also  US-Iran war: Marketers, Dangote trade words over petrol price

“The bulk of the products in that pile are predominantly banned alcoholic beverages in low volumes of less than 200ml (20cl),” she emphasised.

The Director-General further commended other law enforcement agencies, sister agencies and stakeholders for their continuous collaboration, especially in intelligence sharing and security cover during operations.

Also speaking at the event, the Nasarawa State Coordinator of NAFDAC, Dr Gyani Stephen, explained that the exercise was not targeted at hurting people but was intended to save lives.

He advised those in the habit of selling fake and banned products to desist or be ready to face the full wrath of the law, warning that the agency would come after them if they did not change their ways.

In his goodwill message, the Nasarawa State Commander of the National Drug Law Enforcement Agency, Daniel Saidu, represented by Yakubu Awoh, commended NAFDAC for saving lives through the regular seizure and destruction of expired and fake drugs.

He explained that if these dangerous products were allowed into the markets, they could have destroyed millions of lives and affected the mental health of many others.

Source: punchng.com

FOLLOW US ON:

FACEBOOK

WHATSAPP CHANNEL

TWITTER

PINTEREST

TIKTOK

YOUTUBE

LINKEDIN

INSTAGRAM

Continue Reading

Business

Seven modular refineries to begin operations in 2027, read details

Published

on

Nigeria’s modular refining sector is expected to expand next year, with seven new refineries projected to commence operations with a combined capacity of 83,000 barrels per day, according to Argus Media’s George Maher-Bonnett.

Maher-Bonnett disclosed this in Lagos on Wednesday during a presentation at the OTL Africa Downstream conference, where he highlighted the changing dynamics of Nigeria’s petroleum products market amid rising local refining capacity and declining fuel demand.

In his presentation, titled ‘African Energy Outlook’, Maher-Bonnett said four modular refineries operated in Nigeria in September, with a combined capacity of 32,000 barrels per day.

“Four modular refineries operating in September, total 32,000 b/d capacity,” he said.

He added, “Seven new modular refineries to start next year“ with a total of 83,000 barrels per capacity.

The projected additions would represent more than two and a half times the combined capacity of the four modular refineries operating in September, potentially increasing the contribution of smaller refining facilities to Nigeria’s domestic petroleum products supply.

However, the presentation did not identify the seven proposed refineries, their owners or locations, or provide individual capacity figures and commissioning schedules.

Maher-Bonnett also highlighted the growing role of the Dangote Petroleum Refinery in improving Nigeria’s self-sufficiency in petroleum products, despite a decline in fuel demand during the year.

“Nigerian fuels demand is down this year,” the presentation stated, attributing the development to “higher flat prices.”

He added self-sufficiency is improving with Dangote ramp-up, projecting that modular refineries would play a growing role.

The presentation linked the decline in demand to higher prices and noted that the only government intervention during the period covered was an NNPC price reduction.

See also  Four Nigerians among Forbes Africa’s 15 icons for 2026, see full list

“No government interventions, besides NNPC price cut this month,” it stated.

The expected expansion of modular refining capacity comes as Nigeria’s petroleum products market adjusts to increased domestic production and changing international trade flows.

Maher-Bonnett said the Dangote refinery is operating at a high rate, with steady petrol output, reducing the attractiveness of importing some petroleum products from Europe into West Africa.

“Dangote’s 700,000 bpd Lekki refinery is running hard, gasoline output is steady,” the presentation stated.

It also highlighted Ghana’s growing refining capacity, noting that the 45,000-barrel-per-day Tema refinery is ramping up production and improving the country’s self-sufficiency.

According to the presentation, the economics of shipping petroleum products from Europe to West Africa and from Europe to the United States has weakened, with freight costs further affecting the competitiveness of the routes.

Source: punchng.com

FOLLOW US ON:

FACEBOOK

WHATSAPP CHANNEL

TWITTER

PINTEREST

TIKTOK

YOUTUBE

LINKEDIN

INSTAGRAM

Continue Reading

Business

Falana tasks Senate on recovery of $123bn, N66bn oil funds, read details

Published

on

Human rights lawyer, Femi Falana, has asked the National Assembly to compel the recovery of $123.17bn in alleged outstanding oil royalties, taxes and dividends, alongside N66.4bn, from the Nigerian National Petroleum Company Limited and other oil and gas companies.

In a letter dated 28 October, 2026, and titled ‘Request to Recover Dividends, Taxes and Royalties Worth $123.17bn and N66.4bn from NNPC and Other Companies and Remit Same to the Federation Account’, Falana urged the National Assembly to ensure that the alleged outstanding revenues were recovered and remitted to the federation account.

He warned that he would institute legal proceedings at the Federal High Court if the authorities failed to initiate measures to recover the funds within 14 days of receiving the letter.

In an acknowledged copy of the letter made available to The PUNCH on Thursday, the senior advocate said the outstanding revenues covered several categories, including $62bn in unpaid oil royalties, $23.1bn in alleged unremitted dividends from Nigeria LNG Limited, $6.071bn in outstanding industry revenues, and claims relating to stolen crude oil and refinery rehabilitation contracts.

The letter also cited a Supreme Court consent judgment delivered on 20 October, 2018, which it said directed the Federal Government to collect outstanding royalties accrued over 18 years under the Deep Offshore and Inland Basin Production Sharing Contracts Act.

According to Falana, the governments of Akwa Ibom, Bayelsa and Rivers states had approached the Supreme Court to compel the Federal Government to enforce the law, which provided for an upward review of royalties when international crude oil prices exceeded $20 per barrel.

He said a committee constituted by the Office of the Attorney-General of the Federation subsequently determined that $62bn in royalties had not been collected from international oil companies.

Falana added that Akwa Ibom and Rivers states later obtained a Federal High Court judgment for a combined $3.3bn, while Bayelsa State secured a separate judgment for $951m over their alleged entitlements from the outstanding royalties.

See also  US stocks retreat amid renewed inflation concerns

He said the Federal Government had yet to comply with the judgments.

The lawyer also called for the recovery of $29bn linked to alleged crude oil theft and undeclared exports, citing investigations by the Nigerian Maritime Administration and Safety Agency and the House of Representatives.

He said lawyers engaged by NIMASA discovered that about 60.2 million barrels of crude oil, valued at $12.7bn, allegedly stolen from Nigeria, were discharged at the Port of Philadelphia in the United States between 2011 and 2014.

According to the letter, the lawyers submitted their findings to the Office of the Attorney-General after which they filed nine civil cases at the Federal High Court in Abuja and Lagos to recover the value of the alleged stolen crude oil and liquefied gas.

Falana further cited a 2016 House of Representatives ad hoc committee investigation, which he said found that $17bn worth of crude oil and liquefied natural gas had been exported from Nigeria without proper records.

He said the committee found that the crude oil was discharged at the ports of Houston and Lake Charles in the United States.

He urged the National Assembly to direct the Economic and Financial Crimes Commission to pursue the recovery of the funds from the companies allegedly involved.

On the NLNG dividends, Falana alleged that NNPC had failed to remit $23.1bn due to the Federal Government from its 49 per cent shareholding in NLNG.

He explained that NLNG, established in 1989, had paid more than $47bn in dividends to its shareholders over 26 years, with the Federal Government’s share paid through NNPC.

The other shareholders listed in the letter are Shell, with 25.6 per cent; TotalEnergies, 15 per cent; and Eni International, 10.4 per cent.

Falana argued that the dividends received by NNPC on behalf of the Federal Government should have been transferred to the Federation Account in accordance with Section 162 of the 1999 Constitution, as amended.

See also  Rising debt: Financial expert, Idakolo x-rays Nigeria’s situation

He added that resolutions of the Senate and the House of Representatives calling for the remittance of the funds had allegedly been ignored.

The senior advocate also called for the recovery of $6.071bn and N66.4bn in outstanding revenues owed by oil and gas companies, citing the Nigerian Extractive Industries Transparency Initiative’s 2022/2023 Independent Oil and Gas Industry Report.

According to him, NEITI disclosed on 27 September, 2024, that the outstanding collectible revenues due to the Federal Government as of June 2024 stood at the stated amounts.

He said copies of the report were forwarded to both chambers of the National Assembly in November 2024 in line with the provisions of the NEITI Act.

Falana urged lawmakers to support NEITI in recovering the outstanding revenues without further delay.

The letter also questioned the outcome of the rehabilitation of the Port Harcourt, Warri and Kaduna refineries, for which the Federal Executive Council approved contracts totalling about $2.98bn in 2021.

It said the government approved $1.5bn for the rehabilitation of the Port Harcourt refineries in April 2021 and another $1.48bn for the Warri and Kaduna refineries in August of the same year.

Falana argued that NNPC announced in December 2024 that the Port Harcourt and Warri refineries had been substantially completed, while work on the Kaduna refinery was almost finished.

However, he cited NNPC’s subsequent announcement that the Warri refinery ceased operations on 25 January, 2025, following safety issues involving its crude distillation unit main heater. He also referred to the shutdown of the Port Harcourt refineries for planned maintenance in May 2025.

See also  US-Iran war: Marketers, Dangote trade words over petrol price

He argued that the contractors had breached the terms of the rehabilitation agreements and called for the recovery of the contract sums.

“In view of the foregoing, we are compelled to request the Office of the Attorney-General to recover the total sum of $123.17bn and N66.4bn owed the Government of the Federation by the Nigerian National Petroleum Corporation Limited, and some oil and gas companies operating in Nigeria,” the letter stated.

Falana said recovering the funds would reduce the Federal Government’s dependence on external borrowing and provide additional revenue for the federation and the states.

He warned that failure to begin recovery measures within 14 days would prompt legal action.

“If you fail to initiate legal measures for the recovery of the aforesaid huge funds belonging to the Government of the Federation within 14 days of the receipt of this letter, we shall not hesitate to file the necessary processes in the Federal High Court with a view to compelling you to discharge the duty of your office,” he wrote.

Falana also defended his firm’s standing to pursue the matter, citing its involvement in drafting and submitting a bill to amend the Deep Offshore and Inland Basin Production Sharing Contracts Act in 2017.

He noted that the bill was adopted and sponsored by a senator, subsequently passing first reading in the Senate before the dissolution of the Eighth National Assembly. According to him, the Ninth National Assembly subsequently adopted and passed the amendment.

He recalled that the then President of the Senate, Ahmad Lawan, had said the amendment would increase the country’s revenue by at least $1.5bn annually.

Source: punchng.com

FOLLOW US ON:

FACEBOOK

WHATSAPP CHANNEL

TWITTER

PINTEREST

TIKTOK

YOUTUBE

LINKEDIN

INSTAGRAM

Continue Reading

Trending