Nigeria’s transport sector recorded its highest foreign exchange utilisation in six years in the first half of 2026, rising 41.3 percent year-on-year amid growing demand for imported vehicles and automotive components.
The recent CBN data on sectoral foreign exchange utilisation showed that the transport sector’s FX consumption increased from $370.55 million in the first half of 2025 to $523.75 million in the corresponding period of 2026.
The data showed a significant surge in foreign exchange demand over the longer term, rising by 237 percent from $155.53 million in H1 2021 to $523.75 million in H1 2026, highlighting the sharp growth in the sector’s foreign exchange requirements.
The increase in foreign exchange utilisation comes amid a sharp rise in Nigeria’s vehicle import bill, reinforcing the transport sector’s growing demand for foreign-sourced automotive products.
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Ismail Taiwo, senior research associate at Anchoria Capital Group, attributed the increase partly to growing demand in the automotive industry, noting that Nigeria’s changing vehicle market, particularly the entry and rising popularity of newer foreign brands, is creating additional foreign exchange requirements for the sector.
Taiwo identified the growing demand for Chinese vehicle brands, including BYD, Jetour, and Geely, alongside other imported models, as part of the developments shaping the market.
“The importation of replacement components such as engines, tyres and other spare parts also contributes to the sector’s demand for foreign exchange, given the country’s reliance on foreign-sourced automotive products,” he said.
According to the National Bureau of Statistics (NBS) H1 foreign trade statistics report, Nigeria’s passenger motor car imports surged 146.2 percent year-on-year to N1.18 billion in the first half of 2026, compared with N479.26 million recorded in the corresponding period of 2025.
Overall, Nigeria imported N3.73 billion worth of transport equipment and parts in H1 2026, up 44.02 percent from N2.59 billion in H1 2025, highlighting sustained demand for imported vehicles and transport equipment to meet the country’s mobility needs.
Analysts at FMDA Research, in their Q2 market report, noted that total FX utilisation reached $18.34 billion in Q2 2026, the highest in 15 years, driven by record invisible-related demand, while autonomous sources supplied 74.15 percent of FX inflows, their largest share in 13 years.
In April, the federal government waived import duties on electric vehicles, mass transit buses, and manufacturing machinery as part of measures to ease economic pressures and support investment.
This has also led to foreign exchange demand in the transport sector by influencing imports of electric vehicles, mass transit buses, and manufacturing equipment.
Taiwo also pointed to the emerging electric vehicle market as another potential source of FX demand, as the purchase of imported electric vehicles and their associated components requires foreign currency.
“Increased interest in alternative vehicle technologies could widen the range of automotive products Nigeria sources from international markets,” he said.
Juliet Onyema is a transport journalist who reports on Nigeria’s transport and automobile industry. She covers emerging Electric Vehicles (EVs), ranging from adoption to usage, automobile firms and transport policies which affect them, and also recurring trends affecting commuters’ mobility interstate and intrastate.
