Nigerian EV manufacturers, importers lament limited access to bank forex

Nigerian electric vehicle (EV) manufacturers and importers are facing challenges due to limited access to foreign exchange through commercial banks. This scarcity is driving up the cost of importing vehicles, components, and equipment essential for expanding the country's electric mobility industry. These operators say the difficulty is impeding their ability to compete with international manufacturers and suppliers.

Limited access to foreign currency, high borrowing costs, and reliance on imported components are making it tough for local businesses to keep pace with global manufacturers and suppliers. The issues have arisen as the Federal Government pushes for EV adoption, supports local assembly, and seeks to lessen dependence on petrol-powered transportation via incentives and policies for domestic manufacturing.

Dr. Kaycee Orji-Kelechi, chairman of The ROXETTES Group and ROXETTES Eco-Drives Ltd, emphasized the need for banks to streamline their processes to facilitate legitimate businesses' access to foreign currency on the official market without undue delays. Mr. Kelvin Adelakun called for measures to narrow the gap between the official and parallel market exchange rates, noting that local manufacturers have invested significantly in assembly facilities and production capacity but continue to grapple with high operating costs.

The constraints extend beyond EV manufacturers to vehicle importers, who contend that difficulties in obtaining foreign currency through commercial banks can delay payments to overseas suppliers. Biodun Osabinu of Abuja-based Devex Autos mentioned that importers with legitimate orders still struggle to obtain the necessary dollars to pay suppliers on time. He explained that the uncertainty surrounding foreign exchange rates forces businesses to build additional buffers into their prices, tying up working capital.

For local EV manufacturers, expensive bank loans are further inflating production costs and hampering their growth. Dr. Orji-Kelechi pointed out that interest rates on loans obtained from Nigerian banks to finance vehicle imports can reach about 40%, exacerbating the cost of bringing vehicles into the country. He contrasted the financing conditions of local businesses with those of foreign manufacturers, who reportedly enjoy considerably lower interest rates.

Local manufacturers are caught between two difficult choices: raising prices and risking losing customers to cheaper imports or lowering prices and struggling to cover production costs and loan repayments. Although the Federal Government has introduced incentives like import duty waivers for electric vehicles, mass transit buses, and manufacturing machinery since April 2026, industry operators seek a more cohesive incentive framework that benefits both local manufacturers and importers.

To overcome these hurdles and foster the growth of Nigeria's electric vehicle manufacturing sector, industry players believe that enhancing access to foreign exchange, reducing financing costs, and bolstering incentives for domestic production are crucial.