Nigeria’s Tokunbo car market has yet to see a broad decline in vehicle prices nearly two months after the Federal Government cut import levies on used vehicles, as exchange-rate pressures, customs charges and high port costs continue to weigh on dealers and consumers.
The new regime took effect on July 1 under the 2026 Fiscal Policy Measures, reducing the import levy on used vehicles from 15% to 5% and on new vehicles from 20% to 10%. The Nigeria Customs Service also introduced a Green Tax surcharge of 2% on vehicles with engine capacities of 2,000cc to 3,999cc and 4% on those of 4,000cc and above. Vehicles below 2,000cc, electric vehicles, mass-transit buses and locally manufactured vehicles are exempt from the surcharge.
The government also reduced the tariff on fully built passenger vehicles, including four-wheel-drive vehicles and station wagons, from 70% to 40%.
However, the reductions have not translated into an immediate fall in retail prices.
A July 29 investigation by Nigerian Tribune, conducted 28 days after the policy took effect, found that prices remained high at many dealerships. Industry stakeholders attributed the slow adjustment partly to the time required for cheaper import costs to work through existing inventories and the wider vehicle supply chain.
Exchange rates remain an important factor because most Tokunbo vehicles are sourced from abroad. The naira was quoted at about ₦1,339.76 per dollar on August 28, according to market data, while parallel-market quotations were around ₦1,400–₦1,410.
The cost structure also extends beyond the headline levy. Importers still face customs duty, VAT and other statutory charges, while clearing, shipping, storage and logistics costs add to the final price. This means the five-percentage-point NAC levy reduction is only one component of the total cost of bringing a vehicle into Nigeria.
The price pressure comes despite easing inflation. The National Bureau of Statistics reported headline inflation of 15.91% in June 2026, down slightly from 15.93% in May.
Meanwhile, the government is pushing cleaner transport through fiscal incentives. Reuters reported on August 12 that nearly 4,000 electric vehicles had received tax waivers in the first half of 2026.
For Tokunbo buyers, the levy cut therefore represents genuine relief at the import stage, but not necessarily an immediate reduction in showroom prices. Until lower import costs filter through inventories, exchange rates and other supply-chain expenses, cheaper cars may remain more of a policy promise than a market reality.
