Findings by Shipping Position Daily have revealed a steep drop in importation of “tokunbo” (foreign-used) vehicles, while demand for Nigerian-used cars surges amid soaring costs and foreign exchange volatility.
Data from the National Bureau of Statistics show that the value of used-vehicle imports plunged by 83 percent, from ₦819.15 billion in the first half of 2023 to ₦138.62 billion in the same period of 2024. Notably, zero imports were recorded in Q1 2024 — a sharp contrast to ₦69.23 billion spent in Q1 2023 — before recovering to ₦138.62 billion in Q2 2024, representing an 81.5 percent year-on-year decline.
Freight-forwarding sources corroborated the collapse. Data from the Ports & Terminal Multipurpose Limited (PTML) show a sharp drop in the volume of tokunbo vehicle landings from 45,000 units in H1 2023 to 18,000 units in H1 2024. One forwarder noted: “We used to have three vessels monthly, each carrying around 2,000 vehicles. Now, only a single vessel arrives every three months, with under 300 cars.”
Industry sources attribute the plunge to soaring import tariffs, foreign exchange challenges, and regulatory changes.
In an interview, Prince Adewale Ajiboye, Head of Motor Dealers Association of Nigeria (MDAN), lamented that: “Importers can’t bring in tokunbo anymore due to the high exchange rate and increased import duties. Some dealers have dropped out of business altogether.”
Ajiboye explained that in mid-2024, the government replaced the one-percent Comprehensive Import Supervision Scheme (CISS) with a heavier four-percent Import Adjustment Tax (IAT) on vehicle values, in addition to on the existing 35 percent import duty and similar levies — particularly affecting vehicles above 2,000cc.
Meanwhile, licensed customs agents in the maritime sector have expressed concern that the 4 percent Free on Board (FOB) levy will further hurt vehicle and other imports.
A former interim National President of the Association of Nigerian Licensed Customs Agents (ANLCA), Mr. Pius Ujubonu, said the policy could make vehicle acquisition largely unaffordable.
“It’s almost making the acquisition of a vehicle purely a luxurious thing. It didn’t take into consideration the necessity of transportation, because there was no exemption in the policy. If, for example, commercial or special-purpose vehicles were exempted, it would have been different. But the moment you make it a policy without any exemption, it affects many things. In the next few months, vehicles will almost be out of reach for nearly everybody,” he said.
From a different perspective, a member of the National Association of Government Approved Freight Forwarders (NAGAFF), Mr. Stanley Ezenga, urged patience before drawing conclusions.
“The policy just started, so it would be too early to judge the effect. Importation can never stop, but this will lead to inflation because importers will pass the costs on to the final consumers. We should give it about three months to see the real impact,” he said.
A tokunbo car dealer at the popular Berger motor market also lamented rising prices and dwindling patronage: “Prices have skyrocketed; what used to sell for ₦1.9 million for a foreign-used Toyota Corolla in 2015 now goes for ₦9.5 million. Premium models like the Honda CR-V and Lexus RX now sell for between ₦16 million and ₦25 million.”
Beyond imports, the supply squeeze has lifted prices of Nigeria-used cars. A Lagos-based car dealer, Chidi Okoye, said: “We used to go to Cotonou (Benin Republic) for cars. Now, buyers come here because the naira has lost value; importing is too expensive.”
Public safety and quality concerns are also emerging. Ajiboye warned that increased usage and reselling of old vehicles could heighten accident risks due to wear and tear.
In response to the rising costs and market disruption, the Motor Dealers Association is urging government stimulus for the local auto assembly sector. Its President, Funmi Ogundele, stated that: “Promoting locally-assembled vehicles would create jobs, stabilize prices, and reduce our overreliance on costly imports.”
