Assembling a Brighter Future: How Nigeria could build a thriving auto industry, save foreign exchange

Nigeria is positioning domestic vehicle assembly as a tool to create jobs, conserve foreign exchange and boost the economy. The shift comes as the country seeks alternatives to heavy reliance on imported vehicles.

For years, Nigeria has imported large numbers of used and new vehicles, draining scarce foreign currency and limiting industrial growth. According to an industry plan, localising vehicle assembly could ripple across the economy in major ways.

Analysts estimate that for every direct job created in an assembly plant, five to eight further jobs emerge in component, materials and service industries. One study noted at full capacity Nigeria’s auto-industry could create 70,000 skilled and semi-skilled jobs, plus 210,000 indirect jobs in supplier firms and 490,000 more in raw-material sectors. This will result in thousands of additional jobs, a stronger manufacturing base and more formal sector employment.

In economic terms, local vehicle production would mean less money leaving Nigeria to pay for imports, more value added domestically and a stronger export potential. For example, one report projected that with strong investment, Nigeria’s auto sector could contribute up to US$5 billion annually to the economy.

Moreover, as the African Continental Free Trade Area takes effect, locally-assembled vehicles could be exported to neighbouring markets, increasing foreign-exchange earnings and industrial scale.

The push is getting a formal platform in the upcoming Nigerian Auto Assembly Summit 2025, with the theme “Made in Nigeria, Made for the World.” The summit will bring together government, international manufacturers and local suppliers to discuss policy consistency, infrastructure gaps, investment flows and quality standards. Many in the industry believe predictable policy and sufficient incentives will be key to unlocking the full potential.

But challenges loom. The country’s manufacturing sector faces weak job creation, high costs and unstable business conditions. For example, the Manufacturers Association of Nigeria reported only 2,606 new jobs created in the first half of 2024 in manufacturing at large, a decline of nearly 30 % from the previous half.

To succeed, automotive assembly must address high electricity and logistics costs, foreign-exchange shortages, and the need for deep local-content investment.

If Nigeria secures the right mix of investment, infrastructure and policy, the automotive sector could become a pillar of its industrial future, shifting the country from a consumption-driven economy to a manufacturing exporter and opening doors for young Nigerians into formal skilled work.

Read more on First-Ever Nigerian Auto Assembly Summit 2025