On 2 October 2013 the Goodluck Jonathan administration, through Trade and Investment Minister Olusegun Aganga and NADDC Director-General Aminu Jalal, announced the National Automotive Industry Development Plan (NAIDP). The plan had two instruments. First, a 35% import duty plus a 35% levy on fully-built new cars (total: 70%) and the same 70% on used cars older than the standard age-restriction window. Second, a 0% duty on CKD (completely knocked down) kits for assembly inside Nigeria, with declining concessions for SKD (semi-knocked down).
The stated goal was to revive the moribund assembly plants and attract new investors. The announced respondents were impressive on paper: Nissan signed with Stallion Group to assemble at the old VWoN plant (2014); Hyundai assembly resumed at Stallion's Lagos line; Kia went into partnership with Dana Motors; Honda signed with Aniocha Motors in Ota; Ford with Coscharis; Mercedes-Benz commercials with ANAMMCO. By the NADDC's own count, 53 assembly licences were issued between 2014 and 2019.
What actually happened was a textbook policy reversal. New-car sales collapsed faster than assembly grew. Total new-vehicle registrations fell from roughly 50,000 in 2013 to 8,400 in 2017 (NADDC data) — the Nigerian middle class simply could not pay a price 70% higher than the Cotonou alternative. The CKD plants were configured for an annual local market that did not exist; Nissan's Lagos line ran at under 15% of capacity for most of 2015–2019. Meanwhile the tokunbo trade through Cotonou grew — estimated used-car imports rose to over 450,000 units a year by 2019 as the smuggling premium widened. Customs estimated revenue lost to the Seme-border diversion at roughly ₦1 trillion between 2014 and 2019.
The policy survived because it had a constituency (the 53 licensees, NADDC, the National Automotive Design and Development Council Fund financed by a 2% additional levy on every imported car). It did not survive market reality. In 2020 Buhari's Finance Act effectively cut the new-car levy from 35% back to 5%, restoring the duty regime to roughly the 2005 position. The 2013 plan had not industrialised Nigerian motoring; it had transferred more of the trade to Benin and Togo and concentrated the surviving formal market into a handful of luxury distributors (Coscharis-BMW, Globe Motors, Elizade-Toyota) catering to the federal procurement class.
The lasting institutional inheritance of NAIDP is the Automotive Industry Development Plan Levy Fund — a pool of money still being collected at the ports, still being disbursed, and still in search of a Nigerian car industry to subsidise. Act VI is the indigenous attempt to use a slice of that money.
Figure 1
Cars supplied to the Nigerian market, 1960–2024 (thousands of units)
The assembly economy of Peugeot Kaduna and VW Lagos collapsed with SAP. By 2000 nine out of ten cars sold were used imports from Cotonou and Antwerp.