A bill mandating government outfits to procure Nigerian-made vehicles appears to excite local carmakers, but they are wary of blind spots that could undermine the policy drive, ARINZE NWAFOR writes
Nigerian auto manufacturers are confident that in less than a decade, they can manufacture up to 50 per cent of auto components locally. A piece of legislation that seeks to make it a law for federal ministries, departments, and agencies to only purchase vehicles made or assembled locally is boosting the sector’s momentum.
The automotive manufacturing sector foresees a potential turnaround in its fortunes following the second reading of the Local Automobile Industry Patronage Bill 2025 in the Senate on May 15. According to the bill’s sponsor, Sen. Patrick Ndubueze, “Nigeria has consistently ignored homegrown products in favour of foreign alternatives that are not necessarily superior.”
He bemoaned the fact that out of Nigeria’s 54 licensed automobile manufacturers, only six companies remain operational, signifying the scope of the industry’s decline.
Stakeholders, including the Nigeria Automotive Manufacturers Association and the Motorcycle Manufacturers Association of Nigeria, who spoke to The PUNCH, welcomed the bill, hailing it as a game changer that could reposition the domestic auto industry and reduce the country’s dependence on imports.
The legislation, which builds on the Nigeria First procurement policy signed by President Bola Tinubu in May, is expected to formalise what had long been a policy position but lacked statutory backing. When passed, the bill will compel government institutions to support indigenous automotive manufacturers in line with broader goals to stimulate local production, conserve foreign exchange, and boost employment.
NAMA Chairman, Bawo Omagbitse, said the bill represents a significant policy milestone for the country’s industrialisation drive. He explained, “It’s not altogether new for the industry, but most of the prior policies were not granted any legal backing. To the extent that this is going to be backed by law, NAMA believes it is a major milestone, not just for the automotive sector, but for the economy as a whole.”
Omagbitse expressed optimism that the automobile patronage bill policy can spur growth such that manufacturers can make up to 50 per cent of the necessary parts of a vehicle. “With a policy like this, we will, over time, begin to raise local content. We may not have 100 per cent local content in the next four or five years, but our goal is that in the coming seven to eight years, we should be moving towards local content of 50 per cent and more.”
He argued that a “Nigeria First’ procurement policy would create incentives for investment across the domestic value chain. “If we pursue a policy of making Nigeria first, you are creating incentives for people to invest in the economy,” he said. “It is a policy initiative that can stimulate massive investment in the domestic supply chain of most industries, thereby improving local value added and creating more jobs.”
The Local Automobile Industry Patronage Bill is also aligned with the Nigerian Automotive Industry Development Plan, whose objectives include increasing the local content of assembled vehicles to 40 per cent, growing vehicle production to 200,000 units, and transitioning the industry from semi-knockdown to completely knocked-down/completely built-up mode of manufacturing by 2032.
Automotive stakeholders are cautious of risk factors that continue to undermine the sector. Successive government interventions in the auto sector were bedevilled by combined factors from underdeveloped steel, glass, and rubber industries to what NAMA president Omagbitse describes as “a lack of incentives.” Stakeholders, wary that the automobile patronage bill may be susceptible to similar weak points, have called on the Federal Government to expedite the lawmaking process and strengthen other structures that support patronage. They have also beckoned on elected officials to abide by procurement laws as enshrined in the ‘Nigeria First’ executive order.
Nigeria’s automotive ambitions are drawn out
Nigeria has aspired to automotive manufacturing self-sufficiency since the late 1990s. According to the website entry of the National Automotive Design and Development Council (previously known as the National Automotive Council), “the government recognised the importance and basic role of the automotive industry in the industrial development of Nigeria by resuscitating the standing technical committee on the national automotive industry in 1990.”
The standing technical committee evolved into the NAC and drafted the National Automotive Policy in 1993 in a bid to lift the local auto industry dying under intense competition. The military administration of Ibrahim Babangida assented to the NAP.
Researchers Michael Ugwueze, Christian Ezeibe, and Jonah Onuoha, in their 2020 publication entitled ‘The political economy of automobile development in Nigeria,’ noted that “the capacity utilisation in the automobile industry dropped from 90 per cent to 10 per cent between 1986 and 1990.” A fallout of the “liberalisation of importation of different products, including new and used vehicles from Europe, North America, and Asia, notable among these being Volkswagen, Toyota, Hyundai, Honda, Nissan, and Ford Motor Company,” which suffocated local industry.
Successive administrations allowed the 1993 automotive policy to lie fallow. Ugwueze et al. explained that “the military governments of Generals Sani Abacha (1993–1998) and Abdulsalami Abubakar (1998–99), as well as the democratically elected government of Olusegun Obasanjo (1999–2007), failed to implement the policy.” Some succour began to come in 2007, when President Musa Yar’Adua privatised the six state-owned car assembly plants in Nigeria and opened the economic space for private sector participation, according to the research report.
In 2014, the Federal Government formulated the first version of the NAIDP. The 2014 auto policy also failed. According to the former Federal Minister of Industry, Trade and Investment, Adeniyi Adebayo, “National and global economic challenges, as well as issues with respect to implementation and monitoring, significantly challenged the delivery of the objectives of the 2014 Plan.”
After multiple committees, policy drafts, and leadership changes, the country has not lived up to its car-making ambitions.
Stakeholders request legal enforcement of revised NAIDP
The Federal Ministry of Industry, Trade and Investment and the NADDC published a revised NAIDP in 2014. The 2014 NAIDP is a more robust policy document, built on seven pillars of investment promotion and fiscal incentives, local component capacity-building, market expansion and trade facilitation, cost competitiveness promotion, skill acquisition and development, technology development and innovation, standards and safety enforcement.
Under the local component capacity-building pillar, the policy listed a 10-year plan in two phases to develop automotive component manufacturing capacity. In the first five years, the government plans to be sufficient in the production of plastic and rubber parts, lithium batteries for internal combustion engines and electric vehicles, chemicals such as lubricants and paints, and silica for manufacturing windscreens, side and rear mirrors.
Also, in the next five years, the country plans to be self-sufficient in developing leather parts, chassis-related components, engine performance-related components, and others, including cables (used in clutch, throttle, speed, choke, and handbrake), filters, gaskets, brake pads/linings, etc.
The policy also promised to work towards guaranteed government offtake. It stated that the government will ensure implementation of Executive Order 003, thereby “enforcing all federal MDAs with provisions for purchase in their approved budget to patronise locally assembled vehicles.”
It also noted that it will ensure clarity in the public procurement policy, stating that “70 per cent of vehicles procured will be locally assembled upon commencement of the implementation of the NAIDP, and 100 per cent of vehicles procured will be locally assembled by year eight of the policy implementation.” Notably, the document proposed punitive measures for non-compliance, including jail terms without the option of a fine for erring procurement officers, directors of finance, and permanent secretaries who approve the purchase of vehicles outside the registered assemblers and erring private individuals and directors of companies found guilty of engaging in smuggling or importation of banned vehicles.
Omagbitse explained that a viable NAIDP 2014 requires legal power for enforcement.
“We still hope that NAIDP plans will be backed by law. Besides the market aspects, other non-fiscal incentives need to be passed into law to create a groundswell for a more solid push towards greater investment in the industry,” NAMA’s president said.
Stakeholders eye a bigger market amid challenges
Following the Senate’s move, major players in the local automotive sector are hopeful that consistent implementation and strict compliance by MDAs will trigger a significant spike in market demand and factory utilisation.
NAMA president, Omagbitse, stressed that the bill’s passage could de-risk the industry and improve profitability, even if precise revenue projections remain uncertain.
He said, “We cannot quantify the margin increase just yet, but what it can do is stabilise the industry and reduce reliance on imported parts, which are vulnerable to foreign exchange fluctuations.”
He added that while vehicle parts number over 2,000, local substitution of key components, such as body shells, bumpers, glass, tires, batteries, and headlamps, would go a long way in reducing costs and creating domestic linkages. But he noted, “This won’t be an overnight process. You need parts manufacturers to be attracted to Nigeria, and that requires more than just patronage. It involves addressing ease of doing business, infrastructure, and fiscal incentives.”
Omagbitse said that NAMA has been in touch with the NADDC to align with government plans, remarking, “There has been stakeholder involvement. NADDC has been working with us. We hope to make significant progress as far as local content and industry expansion are concerned.”
As of 2025, local manufacturers are operating below optimal capacity due to limited demand and insufficient government orders. Omagbitse acknowledged that zero-level importation is not feasible, noting, “There is still going to be a large amount of importation. But with the right policies, the potential to grow over a few years is very strong.”
He added that key enablers, such as steel production, rubber processing, and glass manufacturing, are still underdeveloped. “Without steel, without rubber, without glass, we won’t have the kind of auto sector we desire. But this bill is a step in the right direction,” he said.
Motorcycle makers decry implementation gaps
MOMAN chairman, Lambert Ekewuba, affirmed that the patronage policy has existed since the military era but suffered from poor enforcement. He stated, “It’s not a new something. The automotive policy from the time of Babangida stated that MDAs should buy from local producers. Only that they are not implementing it.”
Ekewuba maintained that MOMAN has repeatedly called on successive governments to enforce the policy, noting, “Every time we go for meetings, we advocate for it. But nobody implements it. It’s not just about passing laws; it’s about enforcing them.”
He criticised government officials for bypassing local manufacturers in favour of imports, often under questionable empowerment schemes. “We have a case where a politician wants to empower his people with motorcycles, and they apply to the Ministry of Finance for a concession to import motorcycles, instead of buying from local manufacturers.”
Ekewuba explained that such practices violate the spirit of the automotive policy and hurt manufacturers who have invested in factories, equipment, and jobs, saying, “They give contracts to individuals without assembly lines. They import motorcycles and get them assembled by roadside mechanics. That’s not manufacturing.”
He recalled a recent encounter with a senator who admitted to importing motorcycles that were later assembled locally. “I told him respectfully: ‘What you did is against the policy. Do you have a factory? A conveyor line?”
Greed undermining auto industry
Ekewuba accused public officials of hiding behind quality concerns to justify importing vehicles, even though global auto brands only improved through sustained government support.
“They say our vehicles are not of quality. But even Toyota and BMW didn’t get where they are without their governments buying from them,” he said.
The MOMAN chairman added that assembling motorcycles using calibrated equipment, torque settings, and strict processes cannot be compared to what roadside mechanics do. “When we assemble, we set the clutch, brake, and everything to factory standards. A roadside mechanic can’t do 10 motorcycles consistently.”
Ekewuba believes greed is a major reason lawmakers avoid buying from local producers. “If a constituency project is N20m, they want to make personal gains. They prefer importing, because it gives them more control over the money.”
He urged NADDC to insist that all motorcycle importers register through the council. “NADDC knows who the MOMAN members are. If you’re not a member, why are you importing? Where’s your factory?”
Stakeholders optimistic about industrial future
NAMA and MOMAN agree that the success of the Local Automobile Industry Patronage Bill will depend on strict enforcement, presidential assent, and a broader commitment to industrialisation. While the bill promises to reduce dependence on imports and stimulate domestic investment, manufacturers say that broader policy reforms are needed, particularly full legislation for the NAIDP and consistent application of the Nigeria First procurement policy.
According to the MOMAN chairman, “Implementation is our problem, not production.” According to NAMA’s president, “The kinds of investment you need in the auto market are diversified and huge. But with the right policy direction, we can create linkages across sectors and build the kind of economy we all desire.”
For now, manufacturers are bracing for the long haul, investing in production, engaging the government, and advocating for fair play.
