Tariff: Auto manufacturers urge FG to protect local industry

The Nigerian Automotive Manufacturers Association (NAMA) has urged the Federal Government to complement its 2026 Fiscal Policy Measures with stronger industrial protection, warning that tariff liberalisation without adequate safeguards could undermine investments in the country’s automotive manufacturing sector.

In a position paper submitted to the Minister of Industry, Trade and Investment and shared with the National Automotive Design and Development Council (NADDC), the association said the current fiscal measures promote trade liberalisation but do not provide sufficient support for local vehicle assembly and component manufacturing.

The paper, signed by NAMA Chairman, Mr. Bawo Omagbitse, and the association’s Executive Director and Chief Executive Officer, Dr. Harpreet Singh, acknowledged the government’s efforts to stimulate economic growth and align Nigeria’s trade policies with the ECOWAS Common External Tariff and the African Continental Free Trade Area (AfCFTA).

NAMA also welcomed policies that favour locally manufactured vehicles, including the End-of-Life Vehicle Policy and the Vehicle Conformity Assessment Programme.

The auto manufacturers’ position was coming amidst recent tariff review by the federal government which reduced the import tariffs on used vehicles from 15 per cent to five and on brand-new vehicles from 20 per cent to 10 as contained in the 2026 fiscal policy measures.

However, the association warned that the reduced duty gap between imported fully built vehicles and locally assembled units could weaken the competitive advantage of domestic manufacturers and reverse years of investment aimed at developing Nigeria’s automotive industry.

“Nigeria’s automotive industry is still at an infant to intermediate stage. Affordability for buyers and protection for the investment that creates jobs are not in conflict, and our appeal is that the two move together,” Omagbitse said.

The association cited Nigerian Ports Authority data showing that vehicle imports increased by 67 per cent, rising from 35,262 units in the first quarter of 2025 to 58,870 units during the same period in 2026. According to NAMA, the increase reflected importers rushing to bring in vehicles ahead of lower import duties on fully built units.

It warned that further liberalisation without complementary industrial policies could lead to higher import penetration, reduced local assembly volumes, lower factory capacity utilisation and weaker incentives for investment in assembly plants and component manufacturing, including plastics, tyres, batteries and automotive glass.

While expressing support for the government’s objectives of improving affordability, enhancing revenue generation and promoting regional trade integration, the association called for a phased approach to reforms.

“We fully support the government’s goals on affordability, revenue efficiency and regional integration. Our request is simply that these gains be sequenced with the industrial incentives that every successful automotive economy put in place before opening its market,” Singh said.

NAMA pointed to countries such as Thailand, Morocco, South Africa and China, noting that they protected their automotive industries with production incentives, supplier development programmes, export promotion and infrastructure support before liberalising their markets.

Reviewing Nigeria’s automotive policy between 2014 and 2020, the association admitted that localisation and capacity utilisation had remained below expectations, attributing the situation largely to the absence of legislation backing the Nigeria Automotive Industry Development Plan (NAIDP).

To strengthen the sector, NAMA urged the government to restore a wider duty differential between imported vehicles and locally assembled units, make consultations with NADDC and the Ministry of Industry mandatory before introducing future automotive fiscal policies, and fast-track the passage of the NAIDP into law.

It also advocated production-linked incentives, the establishment of an automotive supplier development fund, priority access to foreign exchange for manufacturers and dedicated energy and logistics support for the industry.

“Nigeria risks becoming a large vehicle consumption market without becoming a meaningful automotive manufacturing economy,” the association warned, reiterating its readiness to work with the Federal Government to ensure that economic reforms support the long-term growth of the country’s automotive industry.

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