The Federal Government is set to formally integrate Nigeria’s largely unregulated vehicle recycling sector into the economy, with expectations that the move could yield more than N150bn in yearly revenue from 2026.
The plan was outlined by the National Automotive Design and Development Council, whose Director-General, Joseph Osanipin, said the initiative would be implemented through an End-of-Life Vehicle programme that has already received government approval.
According to Osanipin, the programme will establish a structured system for handling vehicles that are no longer roadworthy, converting what has traditionally been an environmental and safety concern into an organised revenue-generating industry.
“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 Nigeria would adopt a similar model by introducing a modest charge during vehicle registration to fund safe disposal and recycling, admitting the policy may initially face resistance from the public.
Osanipin noted that Nigeria already has a strong informal market for used auto parts, popularly known as the Belgian parts market, driven by preferences for durability and perceived quality.
Studies conducted by the council, he said, showed that more than 85 per cent of parts from end-of-life vehicles are still reusable or recyclable, providing a solid 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 added that the recycling ecosystem 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, with passenger vehicle imports rising to about N1.01tn in the first nine months of 2025, up from roughly N894bn in the same period last year, reflecting improved foreign exchange stability and renewed importer confidence.
Figures from the National Bureau of Statistics showed that the rebound gathered pace in the third quarter of the year, compensating for slower activity earlier in 2025. While the recovery underscores the resilience of the fairly used vehicle segment, it also highlights ongoing challenges such as high import costs and dependence on foreign supply.
As part of broader reforms, the council plans to enforce mandatory pre-export certification for all used vehicles shipped to Nigeria from 2026, a measure aimed at preventing the dumping of rusted and end-of-life vehicles into the country.
Osanipin said Nigeria’s lack 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, rather than Nigerian consumers, would bear the cost of certification.
In addition, the council is pursuing a transition towards cleaner transport by promoting the conversion of petrol and diesel vehicles to electric power and compressed natural gas under the National Automotive Industry Development Plan.
“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.”
Osanipin disclosed that National Occupational Standards for EV maintenance and CNG retrofitting have been developed, with certification programmes expected to commence by 2026.
He also highlighted progress in local vehicle design, citing projects involving tricycles, buses and electric shuttle buses developed in collaboration with 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.”
Osanipin stressed that component manufacturing remains the key value driver in the automotive sector, noting that Nigeria spends more annually on items such as tyres, brake pads, filters and batteries than on importing fully built vehicles.
He revealed that plans are underway to back the automotive policy with legislation, with a draft Auto Industry Bill expected to be presented 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.”