Nigerians imported fewer passenger cars in 2024 as inflation and the sharp depreciation of the naira made foreign exchange more expensive, driving up the cost of vehicle imports. The latest foreign trade report from the National Bureau of Statistics (NBS) revealed that the total value of passenger car imports dropped by 14.3% to N1.26 trillion, down from N1.47 trillion in 2023.
The decline follows a surge in imports the previous year, when auto dealers stocked up amid rising demand. However, worsening economic conditions in 2024 forced businesses and consumers to cut back on non-essential purchases, with imported vehicles among the hardest hit. Many Nigerians turned to the local second-hand car market as the cost of brand-new and foreign-used vehicles skyrocketed.
Over the past five years, Nigeria’s car import trends have fluctuated due to economic cycles, currency volatility, and shifting government policies. In 2020, the country imported N546.79 billion worth of vehicles, a figure that rose to N695.40 billion in 2021. Imports then dipped slightly to N655.69 billion in 2022 before soaring by 124.7% to N1.47 trillion in 2023. The 14.3% decline in 2024 marks a reversal of the previous year’s boom, highlighting the deepening economic strain on consumer spending.
One of the biggest factors driving the drop in car imports was soaring inflation, which eroded purchasing power and made high-value goods like vehicles less affordable. Nigeria’s inflation rate surged to a nearly three-decade high, reaching 34.8% in December 2024, up from 34.6% in November. The annual average inflation stood at 33.2%, significantly higher than the 24.7% recorded in 2023.
With consumer prices rising persistently, many Nigerians prioritized essential expenses over big-ticket purchases, causing a slowdown in demand for imported vehicles. Prospective buyers either delayed purchases or opted for second-hand cars, further dampening the market for new imports.
The depreciation of the naira compounded the situation, making it even more expensive to import vehicles. The official exchange rate closed 2024 at N1,535 per U.S. dollar, a 40.9% drop from N907.11/$ at the end of 2023. In the parallel market, the naira weakened by 26.8%, trading at N1,660/$ compared to N1,215/$ a year earlier.
The World Bank listed the naira among the worst-performing currencies in Sub-Saharan Africa in 2024, citing strong demand for U.S. dollars, weak forex inflows, and delays in forex disbursements by the Central Bank of Nigeria (CBN). The report also highlighted how demand for foreign exchange from financial institutions, businesses, and money managers further pressured the currency.
Despite new CBN forex policies aimed at enhancing market transparency and attracting investment, foreign exchange remains a major hurdle for import-dependent sectors. The steep decline in the naira’s value made forex significantly more expensive, driving up the cost of imported vehicles and discouraging many auto dealers from bringing in newstock.
