Nigeria, as one of Africa’s largest used car markets, is closely watching its policy developments.
In 2026, the country will implement two key new policies that will directly impact the entry barriers and long-term circulation of used cars.
Interpretation of Two Key New Policies
The Nigerian National Automotive Design and Development Council (NADDC) has announced that it will implement the following core policies starting in 2026:
- Mandatory Testing and Certification for Imported Used Cars
- Core Content: All imported used cars must undergo designated testing and certification procedures before entering Nigeria to ensure they meet quality and safety standards. Vehicles that fail the tests will be refused entry.
- Policy Background: This policy aims to improve the quality of road vehicles, ensure public safety, and protect the environment. Previously, Nigeria did not systematically implement such pre-import testing.
- Current Status: Approved, planned for implementation in 2026.
- End-of-Life Vehicle (ELV) Program
- Core Content: Implement a nationwide end-of-life vehicle management program, restrict the import of non-compliant old vehicles, and establish a vehicle recycling system.
- Policy Background: Reducing abandoned vehicles on the road and developing a circular economy (parts remanufacturing and material recycling). NADDC estimates the program could contribute approximately 150 billion Naira annually to the Nigerian economy.
- Current Status: All regulatory approvals have been obtained, and implementation is scheduled for 2026.
Current basic policies and market background
Before navigating the new policy, understanding Nigeria’s existing and stable import rules is fundamental:
Entry Requirements
- Vehicle Age Restriction: Import of used vehicles older than 15 years from the year of manufacture is prohibited.
- Driving Position: Only left-hand drive vehicles are permitted for import.
Main Import Taxes and Fees Composition
Taxes and fees are calculated based on the vehicle’s CIF (Cost, Insurance, and Freight) price and mainly include:
- Customs Duty: 20%
- Value Added Tax (VAT): 7.5%
- National Automotive Commission Tax (NAC): 15%
- Import Adjustment Tax (IAT): Levied based on engine displacement (e.g., 2% surcharge for 2-3.9L vehicles)
Impact and Challenges of the New Policy
The new policy in 2026 will raise export thresholds and costs in the short term, but will help regulate the market in the long run.
- Main Impacts on Exporters
- Increased Export Costs and Cycles: Pre-export testing and certification will incur additional costs and time.
- Changes in Vehicle Supply and Standards: Testing and certification may impose higher requirements on vehicle condition; the ELV program will gradually restrict the import of older vehicles and vehicles in poor condition.
- Stricter Customs Clearance Processes: Without valid certification, customs clearance will be impossible.
- Long-Term Market Trends
The new policy aims to eliminate substandard vehicles and provide a more standardized market environment for vehicles that meet the standards. At the same time, the used parts recycling industry spurred by the ELV program may bring new business opportunities.
Operational Recommendations for Exporters
To ensure smooth market entry, you can refer to the following suggestions for advance planning:
- Adjust Vehicle Sourcing and Compliance Strategies
- Prioritize Vehicle Condition: Focus on vehicles less than 8 years old, with no major accidents, and complete maintenance records.
- Understand Certifications: Consult with Nigerian officials or professional organizations in advance to understand testing standards, certification processes, and designated bodies.
- Restructure Costs and Supply Chain
- Accurately Calculate Costs: Include testing and certification fees, and potentially higher procurement costs in the cost calculation, using a CIF (Cost, Insurance, and Freight) model to calculate comprehensive taxes and fees.
- Choose reliable partners: Partner with freight forwarders or logistics companies familiar with Nigeria’s new policies and possessing strong customs clearance capabilities.
- Focus on long-term trends
- Follow up on ELV details: Pay attention to the specific rules in the ELV program regarding owner buyback compensation and used parts certification, and look for potential opportunities.
- Establish a compliant brand: Use compliance as a selling point to build a brand image of “high-quality vehicles certified through Nigerian channels”.
