FG set to bring up compulsory vehicle recycling fee from 2026
Director General of the NADDC, Joseph Osanipin
… policy would formalise the recycling of vehicles that have reached the end of their useful lives.
The Federal Government has announced plans to tap into Nigeria’s largely informal vehicle recycling market, projecting annual revenues of over N150bn from 2026, as part of sweeping reforms to modernise the country’s automotive industry.
The National Automotive Design and Development Council disclosed this in a statement issued on Sunday, with the Director-General, Joseph Osanipin, saying the initiative would be driven by a comprehensive End-of-Life Vehicle programme already approved for implementation.
Osanipin explained that the policy would formalise the recycling of vehicles that have reached the end of their useful lives, turning what is currently an environmental and safety burden into a major economic opportunity.
“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 said.
According to him, Nigeria’s programme will follow a similar model, requiring a modest fee at the point of vehicle registration to fund environmentally sound disposal and recycling, a move he acknowledged may initially face public resistance.
Osanipin noted that Nigeria already has a thriving informal second-hand auto parts market, commonly referred to as the Belgian parts market, driven largely by durability and quality concerns around new parts.
He said studies by the council showed that over 85 per cent of components from end-of-life vehicles remain reusable or recyclable, creating a strong foundation for a formal 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 said.
He added that beyond revenue generation, the recycling ecosystem would create thousands of jobs across dismantling, refurbishing, logistics and component resale segments.
The announcement comes against the backdrop of a rebound in Nigeria’s vehicle import market this year. The PUNCH recently reported that the value of passenger motor car imports rose to about N1.01tn in the first nine months of 2025, up from roughly N894bn in the same period last year, signalling a resurgence in demand as foreign exchange market stability improves and importer confidence returns.
Data from the National Bureau of Statistics showed that the recovery only gained traction in the second half of the year, with the third quarter posting a sharp uptick in import value that more than offset slower activity earlier in the year.
The rebound underscores the resilience of Nigeria’s auto market, especially the fairly used (“Tokunbo”) segment, but also highlights persistent challenges, including high landing costs, currency exposure, and structural dependence on imports.
As part of the reforms, the NADDC will introduce mandatory pre-export certification for all used vehicles imported into Nigeria from 2026, a measure aimed at curbing the dumping of rusted and end-of-life vehicles into the country.
Osanipin said Nigeria was currently one of the few African countries without such a requirement, making it a destination of choice for exporters seeking to offload unroadworthy vehicles.
He recounted a meeting with a foreign exporter who admitted shipping eight containers of end-of-life vehicles to Nigeria because it offered the “highest profit.”
“We will ensure that importers are held responsible so that whatever you are buying, you know what you are buying,” he said, adding that the cost of certification would be borne by exporters, not Nigerian consumers.
In a parallel push to future-proof the sector, Osanipin unveiled plans to convert petrol and diesel-powered vehicles to electric vehicles and compressed natural gas, in line with the National Automotive Industry Development Plan.
He said the council had commenced extensive training programmes on EV technology, vehicle conversion and alternative fuel systems for both regulators and industry players.
“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 said.
He disclosed that the council had developed National Occupational Standards for EV maintenance and CNG retrofitting, with structured certification programmes expected to begin by 2026.
Osanipin said Nigerian engineers and students were making notable progress in local vehicle design, citing projects involving tricycles, buses and electric campus shuttle buses developed in collaboration with 12 universities and private sector partners.
“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 said.
He stressed that component manufacturing remains the real value driver in the automotive sector, noting that Nigeria spends more annually on tyres, brake pads, filters and batteries than on importing complete vehicles.
The council, he said, was engaging stakeholders to address infrastructure, financing and policy bottlenecks facing component manufacturers, especially as Nigeria positions itself to benefit from the African Continental Free Trade Area.
Osanipin also revealed plans to transform the NAIDP from a policy document into an Act of Parliament, announcing that a draft Auto Industry Bill would soon be presented to the National Assembly.
“Investment in the auto sector is huge. They will need an Act,” he said.
Acknowledging that some of the reforms would face resistance, Osanipin appealed to the media for support in explaining the policies to the public.
“When the pushback comes, we need you to explain to Nigerians what we are trying to do and why,” he said, describing 2026 as a pivotal year for Nigeria’s automotive industry transformation.
