Auto Tariff Reforms Must Not Undermine Nigeria’s Manufacturing Drive, NAMA Warns

Auto Tariff Reforms Must Not Undermine Nigeria’s Manufacturing Drive, NAMA Warns

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

In a policy position submitted to the Minister of Industry, Trade and Investment and copied to the National Automotive Design and Development Council (NADDC), the association said while the new fiscal measures support regional trade integration, they could weaken local vehicle assembly if not complemented by incentives that protect domestic manufacturers and encourage further investment.

The position paper, signed by NAMA Chairman, Mr. Bawo Omagbitse, and Executive Director/Chief Executive Officer, Dr. Harpreet Singh, commended the Federal Government for pursuing economic reforms and aligning trade policies with the ECOWAS Common External Tariff and the African Continental Free Trade Area (AfCFTA). It also welcomed initiatives promoting locally assembled vehicles, the End-of-Life Vehicle Policy and the Vehicle Conformity Assessment Programme.

However, NAMA expressed concern that the reduced duty gap between imported fully built vehicles and locally assembled units could erode the competitive advantage required for Nigeria’s emerging automotive industry to grow.

“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 figures showing vehicle imports increased by 67 per cent, from 35,262 units in the first quarter of 2025 to 58,870 units during the same period in 2026. According to NAMA, the sharp rise suggests importers anticipated lower tariffs on fully built vehicles even before the latest fiscal measures took effect.

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It warned that accelerated liberalisation could further increase vehicle imports, reduce local assembly volumes, weaken capacity utilisation and discourage investment in assembly plants and component manufacturing, including tyres, batteries, plastics, automotive glass and other locally sourced parts.

While reaffirming support for the government’s objectives of improving affordability, boosting revenue and promoting regional integration, Dr. Singh stressed that successful automotive nations first strengthened domestic manufacturing before opening their markets.

“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,” he said.

NAMA pointed to countries such as Thailand, Morocco, South Africa and China as examples of economies that built competitive automotive industries through a combination of tariff protection, production incentives, supplier development programmes, export support and improved infrastructure before embracing wider market liberalisation.

Reviewing Nigeria’s automotive policy between 2014 and 2020, the association noted that local content development and production capacity remained below expectations largely because the Nigeria Automotive Industry Development Plan (NAIDP) lacked legislative backing and investors had insufficient long-term policy certainty.

To strengthen the industry, NAMA recommended restoring a wider tariff differential between imported and locally assembled vehicles, making consultation with NADDC and the Ministry of Industry mandatory before future automotive fiscal policy changes, and urgently passing the NAIDP into law.

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

“Nigeria risks becoming a large vehicle consumption market without becoming a meaningful automotive manufacturing economy,” the association warned.

NAMA reaffirmed its readiness to work with the Federal Government, the Minister of Industry, Trade and Investment and the Director-General of NADDC to ensure ongoing economic reforms strengthen local manufacturing while advancing Nigeria’s long-term industrialisation agenda.

 

Auto Tariff Reforms Must Not Undermine Nigeria’s Manufacturing Drive, NAMA Warns