FG Plans To Generate Over N150bn Annually From Vehicle Recycling By 2026
The Federal Government is preparing to unlock significant revenue from Nigeria’s vehicle recycling space, with projections showing the sector could generate more than N150bn annually from 2026 under new automotive industry reforms. The National Automotive Design and Development Council made this known on Sunday, with its Director-General, Joseph Osanipin, confirming that an End-of-Life Vehicle programme approved by the government will drive the initiative. Osanipin said the policy is designed to regulate the disposal and recycling of vehicles that have outlived their usefulness, converting a long-standing environmental and safety challenge into an organised economic system. “In developed countries, when you buy a new vehicle, during registration, you make a payment towards the disposal of that vehicle when it reaches the end of its life. When it gets to the end of its life, somebody has to be responsible for the disposal.” He explained that Nigeria will adopt a similar approach by introducing a small charge during vehicle registration to support proper recycling and environmentally safe disposal, acknowledging that the idea may face resistance at first. Osanipin noted that Nigeria already operates a vibrant informal market for used vehicle parts, commonly known as the Belgian parts market, driven largely by concerns about the durability of new components. He said findings by the council showed that more than 85 per cent of parts from end-of-life vehicles remain reusable or recyclable, providing a strong base for a structured circular economy. “If someone has an alternative, instead of abandoning vehicles by the roadside, you can turn them in and still make something out of them. The circular economy associated with this will be worth billions of naira every year, if well managed.” He added that the formal recycling framework would also create thousands of jobs across dismantling, refurbishment, logistics and component resale. The announcement comes amid a recovery in Nigeria’s vehicle import market. Data shows that passenger vehicle imports climbed to about N1.01tn in the first nine months of 2025, up from roughly N894bn recorded during the same period in 2024, reflecting renewed demand as foreign exchange conditions improved. Statistics from the National Bureau of Statistics indicated that the rebound gathered momentum in the third quarter of the year, outweighing weaker activity earlier in 2025. While the recovery highlights the strength of the fairly used vehicle segment, it also exposes ongoing challenges such as high landing costs and reliance on imports. As part of the reforms, the council plans to introduce mandatory pre-export certification for all used vehicles shipped to Nigeria from 2026, a move aimed at stopping the inflow of rusted and end-of-life vehicles. Osanipin said Nigeria’s absence of such requirements had made it attractive to exporters seeking to offload unroadworthy vehicles. “We will ensure that importers are held responsible so that whatever you are buying, you know what you are buying.” He added that exporters would cover the cost of certification, not Nigerian buyers. The council is also pursuing vehicle conversion from petrol and diesel to electric power and compressed natural gas in line with the National Automotive Industry Development Plan. Osanipin said training programmes on EV technology, vehicle conversion and alternative fuels were already underway. “Capacity building is one of the major pillars of the NAIDP. We have carried out training on vehicle conversion from PMS and diesel to CNG, as well as on electric vehicles.” He disclosed that National Occupational Standards for EV maintenance and CNG retrofitting have been developed, with certification programmes expected to begin by 2026. Osanipin also highlighted progress in local vehicle design, citing projects involving tricycles, buses and electric shuttle buses developed in partnership with 12 universities and private sector players. “We want what is taught in our institutions to reflect industry realities. Producing even a few world-class auto engineers locally will have a significant impact on the economy.” He stressed that component manufacturing remains the biggest value driver in the automotive sector, noting that Nigeria spends more on items such as tyres, brake pads, filters and batteries than on importing complete vehicles. The council, he said, is engaging stakeholders to address infrastructure, financing and policy challenges facing component manufacturers, especially as Nigeria positions itself to benefit from the African Continental Free Trade Area. Osanipin also revealed plans to strengthen the automotive policy through legislation, saying a draft Auto Industry Bill would soon be submitted to the National Assembly. “Investment in the auto sector is huge. They will need an Act.” He described 2026 as a defining year for Nigeria’s automotive industry and urged the media to help explain the reforms to the public as implementation begins. “When the pushback comes, we need you to explain to Nigerians what we are trying to do and why.”
