The Nigerian government has reduced car import tariffs to 40% under its fiscal policy measures, but experts question whether this will lead to lower prices for consumers.
Experts fault tariff cut impact
Analysts argue that the tariff reduction may not translate into meaningful price drops due to exchange rate volatility, port charges, and dealer margins. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprises (CPPE), noted that the import duty had already fallen from 70% in 2023 to 45%, making the latest cut to 40% less significant. He also highlighted that a new two percent green tax on vehicles with engine capacity of 2,000cc and above could push costs higher.
Dealers reveal true import costs
According to reports by Carlots, the actual cost of importing a car into Nigeria includes not only customs duty but also import duty and levy for used vehicles, VAT, ECOWAS Trade Levy, Port Development Levy, terminal handling, shipping, clearing agent fees, and miscellaneous charges. These additional costs often offset any tariff reduction.
Market surveys show that car prices have surged dramatically. For example, popular used models rose from N1.9 million in 2023 to N10 million in 2026. Similarly, prices for similar models increased from N9 million to N47 million by early 2026. Foreign used cars like the Toyota Corolla saw older models jump from N4.5 million to N8 million in early 2023 to over N9.5 million and N15 million by 2026. Brand new sedans now start at N18 million to N35 million, while SUVs range from N25 million to over N125 million.
Impact on local auto industry
The CPPE boss stated that the new policy does not threaten local dealers, as a wide gap remains between fully built imports and locally assembled vehicles. Completely Knocked Down (CKD) kits still attract zero percent duty, while Semi Knocked Down (SKD) kits are at 10 percent, providing incentives for local assemblers. He suggested that reducing SKD duties to zero could further support local assembly plants, which often rely more on SKD than CKD due to technical and operational issues.
Meanwhile, the government has also released an updated list of prohibited imports, including cement, soaps, fertilizer, and 14 other goods, effective from April 1, 2026, under the ECOWAS Common External Tariff guidelines.
