• Nigerian Customs service announces 90-day duty regularization window
• Debt servicing hits $817.4 million in two months amid declining foreign trade
Tayo Busayo, Abuja
DAILY COURIER - The importation of used vehicles into Nigeria has witnessed a dramatic decline, with bills dropping by 65.8% year-on-year (YoY) to N354.8 billion in 2024, down from N1.04 trillion in 2023. This sharp reduction underscores the dual impact of Nigeria’s worsening economic conditions and the continuous rise in import duties, levies, and taxes on vehicle imports.
According to data from the National Bureau of Statistics (NBS) Foreign Trade in Goods Statistics, the first quarter of 2024 (Q1’24) recorded no import bills for used vehicles. However, the second quarter (Q2’24) saw a significant rebound, with import bills totaling N110.54 billion. This figure grew by 11.9% quarter-on-quarter (QoQ) to N123.77 billion in Q3’24 before declining slightly by 2.6% QoQ to N120.49 billion in the fourth quarter (Q4’24).
The decline in vehicle imports has been attributed to the high cost of import duties and taxes, which have made it increasingly difficult for Nigerians to afford used vehicles. In July 2024, the Ports and Terminal Multipurpose Limited reported a 60% drop in vehicle importation during the first half of the year, citing high import duties and taxes as the primary culprits.
In response to the growing challenges, the Nigerian Customs Service (NCS) announced in February 2025 its intention to grant waivers to vehicle owners, allowing them to pay import duties within a specific time frame to avoid sanctions. This move was followed by a recent announcement from the Federal Government, which introduced a 90-day window for regularizing import duties on specific categories of vehicles.
The National Public Relations Officer of the Nigeria Customs Service, Abdullahi Maiwada, explained that the 90-day window is a proactive measure aimed at enhancing compliance and streamlining import processes.
“In a proactive move to enhance compliance and streamline import processes, the NCS, under the directive of the Honourable Minister of Finance and Coordinating Minister of the Economy, is pleased to announce a 90-day window for regularizing import duties on specific categories of vehicles,” Maiwada stated.
He further clarified that the valuation and assessment of vehicles would be carried out using the Vehicle Identification Number (VIN) valuation method. Import duty payments, along with a 25% penalty, must be made in accordance with the import guidelines, procedures, and documentation requirements for used vehicles under the Destination Inspection Scheme in Nigeria (2013) and the NCS Act 2023.
Meanwhile, Nigeria’s economic challenges continue to mount, with the country spending $817.4 million (approximately N1.26 trillion) on debt servicing in the first two months of 2025. This represents a 3.12% decline compared to the $843.73 million spent in the same period in 2024.
Data from the Central Bank of Nigeria (CBN) International Payments Report revealed that the government spent $540.7 million in January 2025 and $276.7 million in February 2025 on debt servicing. In 2024, Nigeria spent a total of $3.81 billion (about N5.9 trillion) on debt servicing.
The Federal Government’s 2025 budget, dubbed the “Budget of Restoration,” proposed a record-breaking N54.99 trillion in spending, a 56.89% increase from the N35.05 trillion budgeted in 2024. Debt servicing alone accounted for N16.3 trillion, a 95% increase from the N8.25 trillion allocated in 2024.
In addition to the challenges in the automotive sector, Nigeria’s foreign trade in Letters of Credit (LC) payments also declined by 0.55% YoY to $160 million in the first two months of 2025, down from $160.9 million in the corresponding period of 2024.
LC payments, a critical measure of a country’s creditworthiness, stood at $801.06 million in 2024, representing a 39% YoY decline from $1.32 billion in 2023. This decline reflects broader issues in the volume of import trades and the overall economic climate.
As Nigeria grapples with economic hardship, the decline in used vehicle imports and the rising cost of debt servicing highlight the urgent need for policy interventions to stabilize the economy. The 90-day duty regularization window introduced by the NCS is a step in the right direction, but its effectiveness in boosting compliance and reviving the automotive sector remains to be seen.
With the Federal Government’s “Budget of Restoration” aiming to drive economic growth, stakeholders are hopeful that these measures will pave the way for a more stable and prosperous future.
