Nigeria's 40 auto plants produce below 5% capacity, says NADDC
Nigeria's nearly 40 licensed vehicle assembly plants, with an installed capacity exceeding 600,000 units annually, are currently operating at less than five percent of their potential, according to the National Automotive Design and Development Council NADDC. Joseph Osanipin, the Director-General of the NADDC, stated that this low capacity utilization is due to weak vehicle financing, low patronage, grey imports, macroeconomic pressures, and policy enforcement gaps. He noted that 85 to 90 percent of Nigeria's annual vehicle demand is met by imported used vehicles, rather than locally assembled new ones. Osanipin emphasized that the challenge is not a lack of market or production capacity, but the absence of an ecosystem that makes locally assembled vehicles affordable and accessible. High production costs, foreign exchange volatility, logistics bottlenecks, port charges, and inconsistent fiscal policies undermine competitiveness, with local content targets largely unmet. Fewer than five percent of vehicle buyers have access to formal retail credit due to high interest rates and stringent collateral requirements. Osanipin called for a National Automotive Credit Guarantee Fund and the full operationalization of the NADDC-BPP policy framework to prioritize locally assembled vehicles for government procurement. He also highlighted opportunities in compressed natural gas and electric vehicle infrastructure, urging private-sector investment in these areas.
