The Federal Government has announced plans to tap into Nigeria’s largely informal vehicle recycling market, projecting annual revenues of over N150bn from 2026 as part of wide-ranging reforms aimed at modernising the country’s automotive industry.

The National Automotive Design and Development Council disclosed this in a statement issued on Sunday, with its Director-General, Joseph Osanipin, stating that the initiative would be driven by a comprehensive End-of-Life Vehicle programme that has already been approved for implementation.

Osanipin explained that the policy would formalise the recycling of vehicles that have reached the end of their useful lives, transforming what is currently an environmental and safety burden into a major economic opportunity.

“In developed countries, when you buy a new vehicle, during registration, you make a payment towards the disposal of that vehicle when it reaches the end of its life. When it gets to the end of its life, somebody has to be responsible for the disposal,” he said.

According to him, Nigeria’s programme will follow a similar model, requiring a modest fee at the point of vehicle registration to fund environmentally sound disposal and recycling, a move he acknowledged may initially face public resistance.

Osanipin noted that Nigeria already has a thriving informal second-hand auto parts market, commonly known as the Belgian parts market, which is largely driven by concerns over the durability and quality of new vehicle components.

He said studies conducted by the council showed that more than 85 per cent of components from end-of-life vehicles remain reusable or recyclable, providing a strong foundation for the development of a formal circular economy.

“If someone has an alternative, instead of abandoning vehicles by the roadside, you can turn them in and still make something out of them. The circular economy associated with this will be worth billions of naira every year, if well managed,” he said.

He added that beyond revenue generation, the recycling ecosystem would also create thousands of jobs across dismantling, refurbishing, logistics and component resale segments.

The announcement comes amid a rebound in Nigeria’s vehicle import market this year. The PUNCH recently reported that the value of passenger motor car imports rose to about N1.01tn in the first nine months of 2025, compared to roughly N894bn recorded in the same period of the previous year.

The report indicated that the resurgence signalled renewed demand as stability in the foreign exchange market improves and importer confidence returns.

Data from the National Bureau of Statistics showed that the recovery only gained traction in the second half of the year, with the third quarter recording a sharp increase in import value that more than offset slower activity earlier in the year.

The rebound highlights the resilience of Nigeria’s auto market, particularly the fairly used, or Tokunbo, segment, while also underscoring persistent challenges such as high landing costs, currency exposure and structural dependence on imports.

As part of the ongoing reforms, the NADDC plans to introduce mandatory pre-export certification for all used vehicles imported into Nigeria from 2026, a measure aimed at curbing the dumping of rusted and end-of-life vehicles into the country.

Osanipin said Nigeria is currently among the few African countries without such a requirement, making it an attractive destination for exporters seeking to offload unroadworthy vehicles.

He recounted a meeting with a foreign exporter who admitted to shipping eight containers of end-of-life vehicles to Nigeria because it offered the “highest profit.”

“We will ensure that importers are held responsible so that whatever you are buying, you know what you are buying,” he said, adding that the cost of certification would be borne by exporters and not Nigerian consumers.

In a parallel effort to future-proof the sector, Osanipin also unveiled plans to convert petrol and diesel-powered vehicles to electric vehicles and compressed natural gas in line with the National Automotive Industry Development Plan.

He said the council had begun extensive training programmes on electric vehicle technology, vehicle conversion and alternative fuel systems for regulators and industry stakeholders.

“Capacity building is one of the major pillars of the NAIDP. “We have carried out training on vehicle conversion from PMS and diesel to CNG, as well as on electric vehicles,” he said.

He further disclosed that the council had developed National Occupational Standards for electric vehicle maintenance and CNG retrofitting, with structured certification programmes expected to commence by 2026.

Osanipin said Nigerian engineers and students were making significant progress in local vehicle design, citing projects involving tricycles, buses and electric campus shuttle buses developed in collaboration with 12 universities and private sector partners.

“We want what is taught in our institutions to reflect industry realities. Producing even a few world-class auto engineers locally will have a significant impact on the economy,” he said.

He stressed that component manufacturing remains the real value driver in the automotive sector, noting that Nigeria spends more annually on tyres, brake pads, filters and batteries than it does on importing complete vehicles.

According to him, the council is engaging stakeholders to address infrastructure, financing and policy bottlenecks affecting component manufacturers, especially as Nigeria positions itself to benefit from the African Continental Free Trade Area.

Osanipin also revealed plans to transform the National Automotive Industry Development Plan from a policy document into an Act of Parliament, disclosing that a draft Auto Industry Bill would soon be presented to the National Assembly.

“Investment in the auto sector is huge. They will need an Act,” he said.

Acknowledging that some of the reforms may encounter resistance, Osanipin appealed to the media for support in explaining the policies to the public.

“When the pushback comes, we need you to explain to Nigerians what we are trying to do and why,” he said, describing 2026 as a pivotal year for the transformation of Nigeria’s automotive industry.