FX stability drives Nigeria’s car imports to N1.01tr
Nigeria's importation of passenger vehicles experienced a significant recovery in 2025 as increased stability in the foreign exchange market alleviated pressure on both dealers and consumers, according to foreign trade data from the National Bureau of Statistics.
Statistics from the NBS indicated that the worth of passenger vehicle imports surged to N1.01 trillion in the first nine months of 2025, compared to N894.09 billion recorded during the same time in 2024.
This marks a rise of N113.15 billion or 12.66 percent year-on-year, demonstrating a clear recovery following several months of decreased demand caused by currency fluctuations and escalated landing costs.
A detailed analysis of quarterly figures reveals that the recovery gained momentum primarily in the latter half of the year. In the first quarter of 2025, passenger vehicle imports were valued at N224.58 billion, a decrease from N238.73 billion in the same quarter of 2024, showing a drop of N14.15 billion or approximately 5.9 percent.
The second quarter followed a similar pattern, with imports totaling N254.67 billion from April to June 2025, compared to N291.93 billion in the equivalent quarter of 2024. The decline of N37.26 billion equated to a contraction of roughly 12.8 percent.
However, the trend reversed dramatically in the third quarter. From July to September 2025, the value of passenger vehicle imports soared to N527.98 billion, up from N363.42 billion in the corresponding period of the previous year. This represented a growth of N164.56 billion or about 45.3 percent, which more than compensated for the declines seen in the first half of the year and was instrumental in achieving overall growth over the nine months.
Country-level data highlights the extent of the rebound. In the first quarter of 2025, imports of used vehicles equipped with diesel or semi-diesel engines and a cylinder capacity exceeding 2,500cc from the United States totaled N93.51 billion, establishing the US as Nigeria’s primary source of passenger vehicles during that timeframe. South Africa followed with N25.84 billion in goods transport vehicles, while imports from Angola and Liberia were minimal.
In the second quarter, imports from the United States remained high at N99.18 billion, while South Africa contributed N21.43 billion. Liberia and Equatorial Guinea made smaller contributions, reflecting limited volumes in those sectors.
The increase became even more pronounced in the third quarter. Used diesel vehicles over 2,500cc imported from the United States were valued at N184.21 billion alone, nearly double the value recorded in the first quarter. Additionally, there were N38.15 billion worth of used vehicles with an engine capacity between 1,500cc and 2,500cc from the US market.
The United Arab Emirates also emerged as a significant supplier, with imports valued at N13.67 billion, along with N12.68 billion worth of petrol engine vehicles brought in as completely knocked down units.
The PUNCH further noted that vehicles sourced from the US were valued at approximately N415.05 billion in the first nine months of 2025, indicating that the US accounted for 41.21 percent of Nigeria’s total passenger vehicle imports during the reviewed period.
South Africa followed at a considerable distance, with total imports worth N47.27 billion, representing 4.69 percent of the total imports for the period. The United Arab Emirates played a prominent role in the third quarter, with imports reaching about N26.35 billion, or 2.62 percent of the nine-month import value.
Overall, the data indicates that while passenger vehicle imports in the first half of 2025 were N51.41 billion lower than those of the same period in 2024, the third quarter itself surpassed its 2024 counterpart by N164.56 billion. This shift clarifies why the total import value for the nine months concluded higher by over N113 billion.
Analysts indicate that the numbers demonstrate a revived confidence among importers due to a reduction in exchange rate fluctuations and improved access to foreign currency, despite high vehicle prices. The increase in vehicle imports aligns with the trends observed in the foreign exchange market during the third quarter of 2025.
As per an economic and financial markets analysis by FCSL Research, the naira showed a strong and stable performance in Q3 2025.
“The naira appreciated by 3.2 percent to N1,480.66/$ in Q3 2025, as improved dollar inflows, consistent interventions from the CBN, and a $2.87 billion increase in external reserves to $42.23 billion bolstered market confidence,” the analysts from FCSL Research reported.
The study highlighted that foreign exchange trading remained within a tight range of N1,480 to N1,540 per dollar during the quarter, aided by solid oil revenues, the clearance of FX forwards, and renewed foreign portfolio investment, resulting in one of the most orderly quarters for the naira since the start of FX market reforms.
Looking forward, the analysts expressed that the naira’s stability is likely to persist into the fourth quarter, supported by ongoing portfolio inflows, stable oil revenues, and better alignment of monetary and fiscal policies.
“The naira is expected to maintain its stability into Q4, backed by continuous portfolio inflows, consistent oil earnings, and coordinated monetary and fiscal policy execution. Nevertheless, slight volatility may arise during import cycles or due to fluctuations in global oil prices,” the report stated.
Analysts project that the naira will end the year within the range of 1,400.00-1,450.00/$ due to a decline in inflation rates. In a macroeconomic update titled ‘Moderating inflation bodes well for Nigeria’s currency valuation,’ CardinalStone Research anticipates that the slowdown in inflation will enhance the value of the national currency.
CardinalStone noted, “The current disinflation trends are favorable for currency valuation. Together with a lasting current account surplus and a steady increase in FX reserves, this is expected to support further appreciation of the naira. We predict that the FX rate will finish the year between N1,400.00/$ and N1,450.00/$.”
In September 2025, The PUNCH reported that the naira strengthened and remained below the 1,500/$ mark for 10 straight trading sessions at the official market, as per data from the Central Bank of Nigeria. The domestic currency first traded under the N1,500/$ threshold on September 15, closing at 1,497/$. Since that time, the naira has gained strength, finishing Friday's trading at 1,480/. In the parallel market, the currency also experienced positive trends, appreciating 0.13 percent to an average of 1,510/$.
In its assessment of the naira's performance over the last week, AIICO Capital pointed to improved liquidity from domestic participants, oil inflows, and offshore portfolio investors as the foundation for the currency's ongoing rally. It asserted that the recent stability in the foreign exchange market will likely persist in the near future, as the CBN continues to adjust its policies along with fiscal measures from the FGN that aim to enhance liquidity.
Cowry Asset Management Limited expressed similar views, stating, “Looking forward, the naira is anticipated to remain relatively stable across markets, bolstered by stronger foreign exchange inflows, reserve accumulation, and ongoing interventions by the Central Bank of Nigeria.”
Previously, traders and economists observed that the earlier decline in car imports was a reflection not only of weak demand but also of more profound structural issues in Nigeria’s economy, such as high inflation, increasing taxes, and limited access to credit.
However, as foreign exchange conditions become more stable, there seems to be a resurgence in the demand for foreign vehicles. In a conversation with The PUNCH, an official from Ports & Terminal Multipurpose Limited, one of Nigeria’s busiest terminals for car imports, noted that the increase in car imports was due to exchange rate stability, allowing importers to plan more effectively.
“Unlike prior times, the exchange rate has become more predictable. Importers can now plan ahead, inflation is decreasing, and businesses are finding opportunities to expand. This has led to increased vehicle imports compared to the uncertainty that affected the market in 2023 and 2024,” the source commented, speaking on the condition of anonymity due to a lack of authorization to discuss the matter.
Mr. Thomas Alor, the PTML Chapter Chairman of the National Association of Government Approved Freight Forwarders, also confirmed the uptick in vehicle imports this year compared to last year. “While I cannot provide an exact percentage, the number of vehicles arriving at the ports has notably increased,” he stated.
Similarly, Mr. Abayomi Duyile, the Chairman of the Apapa Chapter of the National Council of Managing Directors of Licensed Customs Agents, previously mentioned that the rise is apparent. He partially credited this growth to alterations in the assessment of customs duties on vehicles.
“Last year, car clearance was hampered due to excessively high duties. The inflated imputed values within the Customs system raised costs. However, with the implementation of the 846 valuation method, duties were adjusted downward. This has offered some relief to importers,” he explained.
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