No More Scraps: FG Introduces Compulsory Vehicle Recycling Fee as Imports Hit N1trn
- In a massive push to purge the country of abandoned vehicles, the Nigerian government plans a mandatory vehicle recycling fee
- The government disclosed that the move was to curb waste and abandonment of disused vehicles in the country
- Already, the government is projecting massive earnings from the scheme when it is finally launched
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The federal government has announced plans to introduce a compulsory vehicle recycling fee from 2026, a move expected to place additional costs on Nigerian motorists even as vehicle imports surge to record levels.
Authorities say the policy is aimed at formalising Nigeria’s largely informal auto recycling market and modernising the country’s automotive industry.
Source: Getty Images
The National Automotive Design and Development Council (NADDC) disclosed the plan in a statement, projecting annual revenues of over ₦150bn from the new End-of-Life Vehicle programme already approved for implementation.
Recycling fee to be paid at registration
According to the Director-General of the council, Joseph Osanipin, the initiative will ensure that vehicles that have reached the end of their useful lives are disposed of responsibly, rather than abandoned on roadsides or dismantled under unsafe conditions.
According to a Punch report, Osanipin explained that Nigeria’s recycling model would mirror practices in developed economies, where vehicle owners contribute towards disposal costs at the point of registration.
“In developed countries, when you buy a new vehicle, you make a payment during registration towards the disposal of that vehicle when it reaches the end of its life,” he said, noting that Nigeria must adopt similar standards to address environmental and safety concerns.
While acknowledging that the fee may face public resistance, he insisted it would be modest and would help fund an environmentally sound recycling system nationwide.
Imports rebound as auto demand returns
The announcement comes at a time when Nigeria’s vehicle import market is rebounding strongly.
Data cited by Legit.ng show that the value of passenger motor car imports rose to about ₦1.01tn in the first nine months of 2025, up from roughly ₦894bn in the same period of 2024.
Figures from the National Bureau of Statistics (NBS) indicate that the recovery gathered pace in the second half of the year, with the third quarter recording a sharp jump in import value.
Analysts attribute the rebound to improved foreign exchange stability and renewed importer confidence.
The surge highlights the resilience of Nigeria’s auto market, particularly the fairly used, or Tokunbo, segment.
However, it also underscores the country’s continued dependence on imports and exposure to rising landing costs and currency risks.
Informal market holds billions in value
Osanipin noted that Nigeria already has a thriving informal market for second-hand auto parts, popularly known as the Belgian parts market.
He said studies by the council showed that more than 85% of components from end-of-life vehicles remain reusable or recyclable.
“If someone has an alternative instead of abandoning vehicles by the roadside, you can turn them in and still make something out of them,” he said, adding that a well-managed circular economy could be worth billions of naira annually.
Beyond revenue, the formal recycling ecosystem is expected to create thousands of jobs across dismantling, refurbishing, logistics and component resale.
Tighter rules for used vehicle imports
As part of broader reforms, the council will introduce mandatory pre-export certification for all used vehicles imported into Nigeria from 2026.
The measure is aimed at stopping the dumping of rusted and unroadworthy vehicles in the country.
Osanipin said Nigeria had become a preferred destination for exporters seeking to offload end-of-life vehicles, adding that the cost of certification would be borne by exporters, not Nigerian buyers.
Push for EVs and local manufacturing
The council also unveiled plans to accelerate the conversion of petrol and diesel vehicles to electric and compressed natural gas, in line with the National Automotive Industry Development Plan.
Training programmes on EV technology and alternative fuels are already underway, with formal certification expected to begin by 2026.
Osanipin stressed that component manufacturing remains the biggest value driver in the sector, noting that Nigeria spends more annually on tyres, brake pads, filters and batteries than on importing complete vehicles.
Source: Getty Images
He added that plans are underway to present an Auto Industry Bill to the National Assembly, describing 2026 as a pivotal year for transforming Nigeria’s automotive industry.
Full List of Tokumbo Cars That Sell for Up to N5m
Legit.ng earlier reported that fairly used or second-hand cars imported from countries like the US, Canada, or parts of Europe are referred to as "tokunbo" in Nigeria.
Many believe that these vehicles are often in better condition than locally used ones and are typically less expensive than brand-new models.
Proofreading by Kola Muhammed, copy editor at Legit.ng.
Source: Legit.ng
