NBS Reveals Why Vehicle Import Declined in 2024
Nigerians imported fewer passenger motor cars in 2024 as rising inflation and the continued naira depreciation made foreign exchange more expensive, driving up the cost of vehicle imports.
The latest data from the foreign trade report of the National Bureau of Statistics (NBS) showed that the total value of passenger car imports fell by 14.3 per cent to N1.26tn in 2024 from N1.47tn recorded in 2023.
The decline followed a sharp surge in imports the previous year, when vehicle importation more than doubled compared to 2022.
However, the harsh economic realities of 2024 forced businesses and consumers to cut back on non-essential purchases, with imported cars among the most affected.
Over the past five years, Nigeria’s passenger car imports have fluctuated significantly. In 2020, the country imported N546.79bn worth of vehicles, a figure that increased to N695.40bn in 2021.
However, by 2022, imports declined slightly to N655.69bn before soaring by 124.7 per cent to N1.47tn in 2023. The drop to N1.26tn in 2024 marked a reversal of the previous year’s surge, reflecting the impact of worsening economic conditions.
One of the major factors responsible for the decline was the surge in inflation, which eroded consumers’ purchasing power and made high-value goods, such as vehicles, less affordable.
Nigeria’s inflation rate hit a nearly three-decade high in 2024, reaching 34.8 per cent in December, up from 34.6 per cent in November. Also, the average headline inflation rate for 2024 stood at 33.2 per cent, up from the 24.7 per cent recorded in 2023.
The persistent rise in consumer prices forced many Nigerians to focus on essential expenses, with big-ticket items such as cars taking a back seat. Many prospective buyers either delayed purchases or opted for second-hand vehicles as the cost of brand-new and imported used cars became prohibitive.
At the same time, the depreciation of the naira further compounded the challenges in the auto market. The official exchange rate between the naira and the United States dollar ended in 2024 at N1,535/$, according to an analysis of data from the Central Bank of Nigeria.
This was a 40.9 per cent depreciation over the year when compared to the official rate at the close of 2023, which stood at N907.11/$. In the parallel market, the naira depreciated by 26.8 per cent, trading at N1,660/$1 from N1,215/$1 at the close of 2023.
The World Bank listed the naira among the worst-performing currencies in Sub-Saharan Africa in 2024. The depreciation of the naira is attributed to several factors, including surging demand for United States dollars in the parallel market, limited dollar inflows, and delays in foreign exchange disbursements by Nigeria’s central bank.
The World Bank’s report further highlights that demand for dollars, driven by financial institutions, non-financial end-users, and money managers, has exacerbated the pressure on the naira.
The significant depreciation comes amid the CBN’s introduction of several foreign exchange policies aimed at enhancing market transparency and attracting foreign investors.
The steep drop in the value of the naira made foreign exchange significantly more expensive, pushing up the cost of imported vehicles and discouraging many dealers from bringing in new stock.
