Vehicle owners in Nigeria will be required to pay a mandatory vehicle recycling fee during registration from 2026 as the Federal Government moves to formalise the country’s vehicle disposal sector.

The National Automotive Design and Development Council (NADDC) announced the new charge on Sunday, projecting that it would generate over N150 billion annually for government coffers.

Director-General Joseph Osanipin disclosed that the fee would be collected at the point of vehicle registration under a newly approved End-of-Life Vehicle programme, forcing all vehicle buyers to contribute towards future disposal costs.

“In developed countries, when you buy a new vehicle, during registration, you make a payment towards the disposal of that vehicle when it reaches the end of its life. When it gets to the end of its life, somebody has to be responsible for the disposal,” Osanipin said.

He acknowledged that the additional charge would likely face public resistance but insisted it was necessary to fund environmentally sound vehicle disposal and recycling.

The policy seeks to formalise Nigeria’s thriving informal second-hand parts market, commonly known as the Belgian parts sector, where concerns about the durability of new components drive significant demand.

According to the Council research, over 85 per cent of parts from end-of-life vehicles can be reused or recycled.

“If someone has an alternative, instead of abandoning vehicles by the roadside, you can turn them in and still make something out of them. The circular economy associated with this will be worth billions of naira every year, if well managed,” Osanipin stated.

The Director-General said the recycling ecosystem would create employment opportunities across vehicle dismantling, component refurbishing, logistics and parts resale sectors.

The fee comes as Nigeria’s vehicle import sector recovers from previous slumps. Passenger motor car imports reached approximately N1.01 trillion in the first nine months of 2025, compared to roughly N894 billion during the same period in 2024.

National Bureau of Statistics data showed the recovery gained momentum in the second half of 2025, with third-quarter figures showing substantial increases that offset slower performance earlier in the year.

The resurgence highlights the continued dominance of the fairly used vehicle segment in Nigeria’s automotive market, alongside persistent challenges including high landing costs, currency fluctuations, and heavy import dependence.

From 2026, NADDC will also implement mandatory pre-export certification for all used vehicle imports to prevent the dumping of deteriorated and end-of-life vehicles into Nigeria.

Osanipin said Nigeria remains amongst the few African nations without such requirements, making it an attractive destination for exporters offloading unroadworthy vehicles.

The government has not disclosed the specific amount vehicle owners will be charged as the recycling fee or how the N150 billion revenue projection was calculated.