Why lower vehicle tariffs may not bring imports back to Lagos—Importers

Nigeria's recent decision to lower tariffs on imported vehicles may not be enough to entice significant vehicle imports back to Lagos ports, according to industry operators. While the Government reduced the effective tariff on passenger vehicles and other categories from 70% to 40% and lowered import levies, importers argue that high clearance costs, port bottlenecks, and lengthy processing times remain significant concerns.

The federal government's new fiscal measures, effective April 1, 2026, further cut import levies on new and used vehicles to 10% and 5%, respectively. However, industry operators say the competitiveness of Lagos ports hinges not only on lower statutory charges but also on the speed, predictability, and lower cost of the clearance process.

Gbenga Omotosho, a clearing agent at Apapa Port, notes that importers evaluate the total cost of bringing a vehicle into Nigeria, considering charges beyond customs duty like storage, terminal handling, demurrage, clearing agent fees, and transportation. Okechukwu Ibe, a car importer, believes lower tariffs should eventually reduce vehicle prices, but warns that the policy alone might not deter importers from using neighboring ports.

Ajibola Adedoyin, President of the Association of Motor Dealers of Nigeria, cites clearing costs, port bottlenecks, and the time required to clear vehicles in Nigeria as key factors for importers to consider. According to Adedoyin, routing vehicles through a neighboring country becomes more attractive when the difference in clearance costs outweighs the added logistics.

The cargo dwell time at Nigerian ports, averaging 18-21 days, compared to 5-7 days in Ghana and 4 days in Cotonou, shows that even with lower statutory tariffs, delays at Nigerian ports can offset savings through storage, financing, and other costs. While the new fiscal measures could make vehicle imports through Nigeria more attractive, particularly if lower customs charges translate into lower landed costs, importers say the clearance process must be faster, more predictable, and less expensive.

The Lagos Port Complex possesses infrastructure advantages, including road, water, and rail connections, as well as five private terminals, but translating these into shorter cargo clearance times and lower logistics costs remains a challenge. The cost difference between Nigerian and neighboring ports continues to be a concern for importers.

Despite an 18.3% year-on-year increase in vehicle imports into Nigeria in the second quarter of 2026, according to the Nigerian Ports Authority, industry operators stress that predictability in charges is crucial for importers, as even knowing the applicable customs duty beforehand may not suffice if other charges remain unpredictable.