By John Umeh
The Federal Government is set to introduce a mandatory vehicle recycling levy beginning in 2026, a move expected to unlock more than ₦150 billion annually while overhauling Nigeria’s fragmented and largely informal automobile recycling industry.
The initiative, driven by the National Automotive Design and Development Council (NADDC), forms part of a broader reform agenda aimed at modernising the automotive sector, strengthening environmental standards, and building a sustainable circular economy.
According to the Director-General of NADDC, Joseph Osanipin, the policy will be implemented under a newly approved End-of-Life Vehicle (ELV) Programme, which formally assigns responsibility for the environmentally safe disposal and recycling of vehicles that have reached the end of their operational lifespan.
Under the new framework, vehicle owners will pay a modest recycling charge at the point of registration, creating a dedicated fund to support structured dismantling, refurbishment, and material recovery processes. Osanipin acknowledged that the idea may initially face public resistance but insisted it is a standard global practice.
“In many developed economies, responsibility for vehicle disposal is planned from the day a car is registered. Someone must take responsibility when that vehicle reaches the end of its life,” he explained.
Nigeria’s auto recycling space is currently dominated by an informal spare-parts ecosystem—popularly known as the ‘Belgian parts’ market—which thrives on the durability of used components. Studies conducted by the NADDC show that more than 85 percent of parts from end-of-life vehicles remain reusable or recyclable, providing a strong base for a formalised recycling economy.
Osanipin noted that the programme would reduce roadside abandonment of broken-down vehicles, convert environmental waste into economic value, and create thousands of jobs across dismantling yards, logistics, refurbishment hubs, and component resale networks.
“Instead of vehicles becoming hazards on our roads, owners will have an incentive to turn them in and still extract value. If properly managed, this circular economy will generate billions of naira every year,” he said.
The reforms come amid renewed momentum in Nigeria’s vehicle import market. Official data show that passenger car imports climbed to ₦1.01 trillion in the first nine months of 2025, compared to ₦894 billion over the same period last year, reflecting improved foreign exchange stability and renewed importer confidence.
While the rebound underscores the resilience of the used-car (“Tokunbo”) market, it also exposes structural weaknesses—particularly Nigeria’s vulnerability to the importation of ageing and unroadworthy vehicles.
To address this, the NADDC will introduce mandatory pre-export certification for all used vehicles bound for Nigeria from 2026, a move designed to halt the dumping of end-of-life and severely rusted vehicles. The certification cost, Osanipin said, will be borne by exporters, not Nigerian buyers.
He revealed that Nigeria has become a preferred destination for exporters seeking to dispose of unserviceable vehicles due to the absence of strict entry controls.
“We want importers to know exactly what they are buying, and we want exporters to be accountable for what they send to Nigeria,” he said.
Beyond recycling and imports, the government is also accelerating plans to transition petrol and diesel vehicles to electric vehicles (EVs) and compressed natural gas (CNG) in line with the National Automotive Industry Development Plan (NAIDP).
Osanipin disclosed that nationwide training programmes on EV technology, vehicle conversion, and alternative fuel systems are already underway, targeting regulators, technicians, and private-sector players. Certification programmes for EV maintenance and CNG retrofitting are expected to commence in 2026, backed by newly developed National Occupational Standards.
Local innovation is also gaining traction, with Nigerian engineers and students collaborating with 12 universities and private partners to design tricycles, buses, and electric campus shuttle vehicles.
“What our institutions teach must reflect industry realities. Producing even a small number of globally competitive auto engineers will have a major economic impact,” Osanipin said.
He stressed that component manufacturing—including tyres, brake pads, filters, and batteries—remains the most valuable segment of the auto industry, noting that Nigeria spends more annually on importing these parts than on fully assembled vehicles.
To support long-term investment, the NADDC is pushing to transform the NAIDP from a policy framework into law, with a draft Automotive Industry Bill set to be presented to the National Assembly.
Acknowledging that the reforms may attract resistance, Osanipin described 2026 as a turning point for Nigeria’s automotive future and appealed to the media to help educate the public on the long-term benefits.
“Change is never easy, but these reforms are necessary. We need public understanding to build a safer, cleaner, and more competitive automotive industry,” he said.
