Nigeria: 2026 tariff reforms could harm local auto industry, manufacturers warn

Nigeria's automotive manufacturers are urging the Federal Government to bolster its 2026 fiscal policy reforms with strong industrial protection measures. The Nigerian Automotive Manufacturers Association (NAMA) warns that tariff liberalization without sufficient safeguards could jeopardize investments in the nation's automotive manufacturing sector. NAMA's position paper highlights that while the new fiscal measures aim to promote trade liberalization and align with ECOWAS and AfCFTA tariffs, they lack the necessary industrial support for local vehicle assembly and component manufacturing.

NAMA commended the government's efforts to stimulate economic growth and initiatives like the End-of-Life Vehicle Policy and Vehicle Conformity Assessment Programme. However, the association expressed concern that a reduced duty gap between imported fully built vehicles and locally assembled units could undermine domestic manufacturers' competitiveness. They argue that narrowing this tariff differential risks eroding decades of investment by reducing the protection local assemblers need to achieve economies of scale and deepen local content.

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Our automotive industry is still at an infant-to-intermediate stage. Affordability for consumers and protection for investments that create jobs are not mutually exclusive, and both objectives should progress together.

"Our automotive industry is still at an infant-to-intermediate stage. Affordability for consumers and protection for investments that create jobs are not mutually exclusive, and both objectives should progress together," stated NAMA Chairman Mr. Bawo Omagbitse. Data from the Nigerian Ports Authority shows a 67% surge in vehicle imports in early 2026 compared to the same period in 2025, indicating importers' expectations of lower duties. NAMA cautioned that premature market liberalization could lead to increased imports, reduced local assembly, lower factory capacity utilization, and weaker investment incentives for assembly plants and component manufacturers.

Dr. Harpreet Singh, NAMA's Executive Director/CEO, emphasized that while the association supports the government's goals of improving affordability, boosting revenue, and advancing regional trade integration, these must be implemented alongside industrial incentives. "Our request is simply that these reforms be sequenced with the industrial support measures that successful automotive economies established before opening their markets," he said.

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Our request is simply that these reforms be sequenced with the industrial support measures that successful automotive economies established before opening their markets.