Nigeria’s Used Car Imports Plummet by 83% Amid Foreign Exchange Crisis
In a surprising turn of events, Nigeria’s imports bill on used vehicles, also known as Tokunbo, has dropped by a staggering 83% in the first half of 2024. According to the National Bureau of Statistics, the value of imported used vehicles stood at N138.62 billion in Q2 2024, a significant decline from the N819.15 billion recorded in the same period last year.
The data also revealed that the majority of these used vehicles were imported from the United States of America, with total imports from America amounting to N971.84 billion in Q2 2024. Meanwhile, the All Products Terms of Trade (TOT) Index on average decreased by 0.06 percentage points, indicating a decline in the country’s trade balance.
Despite the suspension of a 25% penalty on illegally imported vehicles by the Nigeria Customs Service in March 2024, the drop in used car imports is attributed to the ongoing foreign exchange crisis in the country. The crisis has led to a sharp decline in the value of the Naira against the dollar, making imports more expensive and less attractive to consumers.
The exchange rate between the Naira and the dollar has reached N1540.78 last Friday, a significant increase from N460 in June last year. This has had a ripple effect on the economy, causing a spike in the cost of imports and making it difficult for businesses to operate.
The decline in used car imports is a significant development in Nigeria’s economy, particularly in the automotive sector. As the country continues to grapple with the foreign exchange crisis, it remains to be seen how this trend will affect the market and the economy as a whole.
