Nigeria Just Cut Tokunbo Import Duty to 5 Percent but Nobody Is Checking Whether the Cars Were Written Off in America

The tariff cut went through in May 2026, and the Comptroller General of the Nigeria Customs Service, Adewale Adeniyi, confirmed it publicly on Monday, July 7, before the House of Representatives Committee on Customs and Excise. Used vehicles down from 15% to 5%, new vehicles from 20% to 10%, all part of the 2026 fiscal policy measures. Leke Abejide, who chairs the committee, told the room the public should clap for the federal government. The clearing agents at Apapa and Tin Can Island will tell you it is a relief in the sense that landing costs come down by maybe a few hundred thousand naira per vehicle depending on the CIF value, and in a market where 63% of households cannot afford a car without financial support according to PwC figures, any reduction in cost sounds like good news. There are roughly 14 million cars on Nigerian roads and used imports account for about 70% of vehicles sold. NBS put the 2025 figure for passenger car imports at N1.58 trillion, which was up 24.64% on N1.26 trillion the year before, and the United States was still the biggest single source by a wide margin, somewhere around 41 to 44% of total value. None of this is going to slow down now that duty has been cut. The question I keep asking, and that nobody in government seems interested in answering, is what exactly is being imported.

Sunday Vanguard published an investigation in May 2026 that laid out the problem in terms that should have embarrassed somebody at Customs headquarters. Nigeria’s import system does not explicitly prohibit salvage vehicles. That is not my interpretation, that is what Dr Segun Musa, chairman of NAGAFF, told the newspaper on the record. Used vehicles, including accident vehicles, are assessed based on declared condition and value. The duty payable adjusts downward because the declared value is lower, and the car clears through the port and enters the Nigerian market without anyone checking whether it was written off by an insurer in Texas or totalled in a Florida highway pile up. One clearing agent working one of the Lagos ports reckoned roughly 40 out of every 100 vehicles coming in had heavy damage. Another put the share of accidented stock above 70%. Those are trade estimates, not measured data, and I would take them with some caution, but even the lower figure should be alarming.

The federal government did announce in April 2026 through the Minister of State for Industry, Trade and Investment that accident damaged vehicles were effectively barred from importation, with a new pre shipment inspection framework rolled out under the Vehicle Certification Programme. The Association of Motor Dealers said they were engaging with the NADDC on how inspections would work at the point of export. It sounded good. The Vanguard investigation, published one month later, found that nothing had materially changed at the ports. Cars with visible structural damage were still clearing. The VIN valuation policy that Customs operates does check the vehicle identification number against a pricing database, but it does not query US title status, does not flag salvage brands, does not pull accident history. A vin decoder run against an American database before the car ships would catch most of this. Nobody is doing it systematically.

The safety implications are not theoretical. NBS counted 13027 road accident cases in 2021, and UNEP has found separately that countries without proper used vehicle regulations tend to have road traffic death rates well above the global average. The FRSC’s Public Education Officer, Ohaeri Osondu, told Sunday Vanguard that the Corps does not even have the statutory mandate to determine roadworthiness. Roadworthiness is supposed to be the VIO’s job, the Vehicle Inspection Office, but the VIO operates at the state level, and the funding and standards vary enormously from one state to the next. So the chain of oversight looks roughly like this. Customs clears the vehicle without checking its history. FRSC cannot assess roadworthiness. The VIO is supposed to but lacks the capacity in most states to do it properly. The buyer, someone who probably saved two or three years for a Tokunbo SUV, drives it off the lot at Berger Yard or Trade Fair not knowing whether the thing was salvaged, sat in floodwater for a week, or took a hit bad enough to bend the chassis. A vin checker matched against US records would give them that information in about ten minutes, but the concept barely exists in the Nigerian market yet.

NCS generated N7.277 trillion in revenue in 2025, beating its target by about N693 billion, and the 2026 revenue target is N11.074 trillion. The service is under pressure to collect, and anything that increases import volume helps that number even if the quality of what is coming through the gates is deteriorating. Customs statutory charges before the tariff cut sat between 42% and 45% of CIF value once you added shipping, terminal handling, and agent fees on top, according to a Tribune report from March 2026. The cut to 5% eases that burden, but it does not eliminate the other charges, and it certainly does not address the salvage vehicle problem. If anything, it makes it worse. Lower duty on a car that was already cheap because it was bought at a US salvage auction for a fraction of its original value means the margins for importing accidented stock just improved. The naira appreciated 7.4% in 2025, closing at N1429 to the dollar on December 31, its first annual appreciation since 2012 according to CBN data, and that made dollar denominated auction purchases more accessible for a period. Whether that appreciation holds through 2026 is another matter, but the structural incentive to import salvage cars has only strengthened since the tariff announcement. A written off SUV bought at auction in the US for maybe $3000 to $4000, shipped, cleared at the lower duty rate, given a cosmetic repair at a workshop in Lagos, and sold as premium Tokunbo at full market price. The margin on that transaction is significant, and nobody along the way checked whether the car should be on the road at all.