2026: What hope for auto policy?

For more than a decade, Nigeria’s dream of building a vibrant automotive industry has remained suspended in uncertainty, trapped between policy drafts, unfulfilled promises, and legislative setbacks.

While the country continues to rely heavily on imported used vehicles, other African nations, most notably South Africa, Ghana, and many others have raced ahead, attracting global automotive giants and positioning themselves as competitive manufacturing hubs.

At the heart of Nigeria’s stagnation is the Nigerian Automotive Industry Development Plan (NAIDP), widely known as the auto policy. Conceived as a blueprint for developing a robust auto manufacturing ecosystem, the policy outlines measures to boost local assembly, reduce vehicle importation, encourage investment from global original equipment manufacturers (OEMs), and make new vehicles more affordable to Nigerians.

But over 10 years after its introduction, the policy remains in a draft state, never fully transformed into law. Its implementation has been stalled over the years and the endless wait has stalled investments, crippled existing assembly plants, and weakened industry confidence.

A decade of hope and setbacks

When the 8th Senate under Senator Bukola Saraki passed the Auto Policy Bill in 2017, industry stakeholders celebrated what seemed like a major breakthrough.

But those hopes were dashed when the Bill failed to secure presidential assent. The Buhari administration rejected it, citing conflicts with existing laws, a decision that pushed the industry back to square one.

In the years that followed, the Ministry of Industry, Trade and Investment repeatedly promised that a revised draft would be sent to the National Assembly but up till now that has not happened.

Ghana moves ahead

While Nigeria struggled with policy inertia, Ghana took bold steps. As far back as 2015, Ghana launched its Ghana Automotive Development Policy (GADP), designed to turn the country into West Africa’s automotive hub.

The clear and stable policy environment in Ghana attracted top OEMs, including Toyota, Volkswagen, Nissan, Dana Motors, among others, most of whom have set up assembly plants and begun rolling out vehicles for the regional market.

Ironically, Nigeria—with its massive population and market potential—remains heavily dependent on imported used cars. Brand-new vehicles are priced far beyond the reach of most households, and without a functioning auto policy, the country is unable to attract major automotive investments or transition towards electric mobility like other parts of the world.

Industry stakeholders say the prolonged absence of a legal framework has cost Nigeria dearly.

“Our losses are immeasurable,” says industry expert Remi Olaofe, adding, “We have lost jobs, investments, and skilled manpower. Many factories built under the initial policy plan have shut down. Trained workers are now idle, and the country has simply gone back to importation.”

Under the NAIDP, the federal government had approved more than 50 local assembly plants. Today, fewer than 10 remain active—and even those operate at minimal capacity, stuck at the semi-knocked down (SKD) stage instead of progressing to full manufacturing (CKD), as originally envisioned.

Former NADDC acting DG, Mamudu Lukman, acknowledges that the policy spurred some gains in the early years, but says most programmes have since been abandoned.

“Billions of naira have been invested but without legislation ensuring policy stability, OEMs will not commit to capital-intensive auto manufacturing.”

Hope in sight?

With the appointment of Joseph Osanipin as NADDC Director-General in 2024, the auto policy regained some momentum. The council has held several stakeholder consultations aimed at refining the draft and ensuring broad industry support.

However, there is still no clear timeline on when the Executive Bill will be submitted to the National Assembly.

Speaking at the recent NAJA awards, the NADDC DG reinforced the need for the auto policy to be in force, assuring that the government is doing everything possible to make it a reality in 2026.

According to him, the automotive sector is one of the priority industries capable of delivering large-scale jobs, technology transfer and value chain development if supported by clear and enforceable rules.

“The Nigeria Industry Policy has been approved by the Federal Executive Council and now guides Nigeria’s industrial development,” Osanipin said, adding, “The next step is to enact the Auto Policy into law. These are deliberate actions to ensure the automotive sector receives the attention and priority it deserves.”

An auto industry stakeholder, Remi Adams in a chat with our correspondent said the policy would encourage more investment by auto companies into EVs and CNG-powered vehicles.

Adams who is a Marketing Manager with Honda Automobile West Africa stated that the CNG initiative has not been integrated into the auto policy.

He said, “We like to follow a laid down clear-cut process. And the auto policy as of today has not reflected any plan for CNG.

“We know of course that is in the market but we don’t operate like that. We don’t operate just on what they say or what they want because our system is well structured and the moment we start we want to finish.

“So for now the auto policy itself has not accommodated or communicated in that direction. It was more or less a presidential briefing as regards connecting to CNG but as a brand globally we are not static, we are of course a global player and we are not just in Nigeria. So we are definitely making internal plans to transit from ICE to hybrid and of course eventually electric vehicles.”

Adams reiterated that many stakeholders are concerned about the delay in implementing the auto policy.

“A lot of stakeholders are looking forward to that because it solidifies the direction of the government, meaning that it’s not something that can be out of the blue, just cancelled. And for us to go into any diversification, it means we have to reinvest. And reinvestment should be founded on something that is concrete,” he said.

Until the auto policy becomes law, the industry’s long-promised transformation may remain out of reach, and the wait—already a decade long—may continue.

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