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

Nigeria’s decision to cut tariffs and import levies on vehicles may not be enough to return a significant share of vehicle imports to Lagos ports, as industry operators say high clearance costs, port bottlenecks and lengthy processing times remain major concerns for importers.

The Federal Government reduced the effective tariff on fully built passenger vehicles, Four Wheel Drive vehicles and station wagons from 70% to 40% under its 2026 Fiscal Policy Measures, effective April 1, 2026.

It also cut the import levy on new vehicles from 20% to 10% and on used vehicles from 15% to 5%, effective July 1.

However, operators say the competitiveness of Lagos ports will depend not only on the lower statutory charges but also on how quickly and predictably vehicles can be cleared and moved into the Nigerian market.

What they are saying

Gbenga Omotosho, a clearing agent at Apapa Port, said importers compare the total cost of bringing a vehicle into Nigeria rather than customs duty alone.

• “For automobile importers, the difference is not merely statistical. Every additional day a vehicle remains within a port or terminal can add storage, handling, financing and other logistics costs,” he said.

According to him, an importer comparing Lagos with Cotonou would consider customs charges alongside storage, terminal handling, possible demurrage, clearing agent fees and transportation costs before deciding where to route cargo.

• “The more appropriate question to ask is: What is the total cost of getting the vehicle from the ship to the Nigerian market?” he said.

Okechukwu Ibe, a car importer in Lagos, said the lower tariffs should eventually reduce vehicle prices but warned that the policy alone may not be sufficient to discourage importers from using neighbouring ports.

• “For car importers, the implication is straightforward, a lower customs bill will not automatically make Lagos cheaper if port and logistics charges wipe out the savings,” he said. Ibe said improvements in the efficiency of Lagos ports would be necessary if the government wants importers to completely move away from Cotonou.

Port efficiency remains a major concern

Ajibola Adedoyin, National President of the Association of Motor Dealers of Nigeria, identified clearing charges as a major reason importers route cargo through neighbouring countries.

He also cited port bottlenecks and the time required to clear vehicles in Nigeria as important considerations for importers.

According to Adedoyin, routing vehicles through a neighbouring country becomes commercially attractive when the difference in clearing costs is large enough to offset the additional logistics involved.

The competitiveness gap is also reflected in cargo dwell times.

Vice President Kashim Shettima recently said cargo dwell time at Nigeria’s major ports averaged between 18 and 21 days, compared with five to seven days in Ghana and about four days at Cotonou.

The disparity means that even when statutory tariffs are lower, delays at Nigerian ports can erode part of the savings through storage, financing and other associated costs.

The new fiscal measures could nevertheless make vehicle imports through Nigeria more attractive, particularly if lower customs charges translate into lower landed costs.

For this to happen, industry operators say the clearance process needs to be faster, more predictable and less costly.

The Lagos Port Complex also has infrastructure advantages that could support greater vehicle imports.

The Nigerian Ports Authority says the port has road, water and rail connections as well as five private terminals.

The challenge, however, is translating these infrastructure advantages into shorter cargo clearance times and lower logistics costs.

For importers, predictability is also important. Knowing the applicable customs duty before a shipment arrives provides limited advantage if valuation, inspection, terminal charges, storage costs or other charges remain difficult to predict.

What you should know

The cost differential between Nigerian and neighbouring ports has remained a source of concern for importers.

• The Importers Association of Nigeria said in May that clearing a 20 foot container could cost between N7 million and N8 million at Cotonou, compared with N14 million to N15 million at Apapa.
• The association said the disparity in charges was contributing to cargo diversion to neighbouring countries. Although the comparison relates to containerised cargo rather than vehicles specifically, it highlights the broader cost disadvantage facing Nigerian ports.
• The government’s tariff reductions therefore remove part of the incentive for importers to seek cheaper routes, but industry operators say the policy will have a stronger impact if accompanied by improvements in port operations.

Meanwhile, vehicle imports into Nigeria increased by 18.3% year on year in the second quarter of 2026, according to the Nigerian Ports Authority.