Import bill on Used vehicles in Nigeria drops by 83%
Nigeria’s import bill for used vehicles, commonly referred to as “Tokunbo” cars, has seen a dramatic decline, dropping by 83% in the first half of 2024. According to data from the National Bureau of Statistics (NBS), the import value fell to ₦138.62 billion, a sharp decrease from ₦819.15 billion recorded in the same period in 2023.
The NBS, in its Commodity Price Indices and Terms of Trade Data, highlighted that in the second quarter of 2024 alone, the value of imported used vehicles stood at ₦138.62 billion. This marks an 81.5% drop from ₦749.92 billion in Q2 2023. The report noted that the bulk of these imports came from the United States.
“Total imports from the United States during Q2 2024 amounted to ₦971.84 billion,” the NBS noted. The bureau also reported a slight decrease in the All Products Terms of Trade (TOT) Index, with an average reduction of 0.06 percentage points during the period.
This significant drop in vehicle imports comes despite the Nigeria Customs Service suspending a 25% penalty on illegally imported cars in March 2024. Analysts attribute the decline to Nigeria’s ongoing foreign exchange crisis, which has led to a substantial devaluation of the naira. As of last Friday, the exchange rate between the naira and the US dollar stood at ₦1,540.78, compared to ₦460 in June 2023.
The devaluation has made imports, including vehicles, significantly more expensive, contributing to the sharp drop in Nigeria’s used car import bill.