FG orders MDAs to purchase locally assembled vehicles and threatens sanctions

Daud Olatunji

The federal government has directed all ministries, departments and agencies (MDAs) to purchase vehicles only from authorized local assemblers or their authorized dealers, warning that any violation will attract sanctions, including blacklisting and revocation of operating licences.

The directive, announced in Abuja on Friday, is part of the government’s efforts to revive local manufacturing, create jobs, reduce import dependency and strengthen Nigeria’s automotive industry under the “Nigeria First” policy.

The Director-General of the National Automotive Design and Development Council (NADDC), Oluwemimo Osanipin, disclosed the decision during a joint press conference with the Director-General of the Bureau of Public Procurement (BPP), Adebowale Adedokun.

Osanipin said the policy covers all vehicles purchased by federal government institutions, including commercial vehicles acquired for specific projects.

“We are fundamentally changing the Nigeria First policy. All vehicles purchased by ministries, departments and agencies, including project utility vehicles, must be sourced exclusively from authorized local assemblers or their authorized dealers,” he said.

The NADDC chief said any government agency seeking to purchase a foreign-assembled vehicle must demonstrate that no suitable locally assembled alternative is available and obtain direct presidential approval.

He added that all vehicles supplied to the Government must have traceable Vehicle Identification Numbers (VINs), which will be verified through the council to ensure compliance.

“Any supply outside authorized local assembly lines will attract immediate regulatory sanctions, including blacklisting and license revocation,” Osanipin warned.

The directive signals a tougher approach to applying local content requirements in public procurement, with government agencies expected to prioritize domestically assembled vehicles over imported alternatives.

Osanipin said Nigeria’s vehicle assembly plants have a combined annual production capacity of 370,520 vehicles, arguing that greater support from the government could help local manufacturers expand production and strengthen the domestic automotive value chain.

However, it challenged assemblers to go beyond producing expensive vehicles for high-income consumers and develop more affordable models for the broader population.

“There are vehicles that are for high-end people; we continue to produce them, but we take advantage of the over 250 million Nigerians who need mobility at a very reasonable cost,” he said.

The NADDC director general also urged manufacturers to increase local production of spare parts, describing the component manufacturing sector as one of the key potential beneficiaries of the policy.

According to him, spending on spare parts represents an important market opportunity that could support domestic businesses beyond the initial purchase of vehicles.

“The biggest beneficiaries of this policy will be local content producers. We spend more on spare parts than even purchasing vehicles,” he said.

He added that greater government support for locally assembled vehicles would create lasting business opportunities for Nigerian companies involved in repairs, maintenance and support throughout the operational life of the vehicles.

The Director General of the BPP, Adedokun, said the Federal Executive Council had mandated the office to establish procurement standards across all sectors and provide the institutional framework for the implementation of the Nigeria First policy.

He said the bureau had consulted local vehicle assemblers and other industry stakeholders to identify challenges facing the sector, particularly concerns over whether Nigerian manufacturers would receive sufficient patronage from the government.

Adedokun said the consultations revealed that the availability of a reliable market is a major concern in the industry, including among automotive component makers.

“We undertook what is usually not the norm, which is stakeholder consultation with local assemblers. We understood their problems. Their biggest fear was the market,” he said.

“Their biggest fear was that even if we continued to produce, Nigeria would protect us, including those in the spare parts sector.”

He argued that Nigerian manufacturers are already producing spare parts suited to the country’s operating conditions and consumer needs, adding that sustained demand could encourage further investment in local manufacturing.

Adedokun said the policy should also spur industrialization, generate employment for technicians and other skilled workers, and position Nigeria as a manufacturing hub serving the economic community of West African States and the broader African market.

However, he warned that local assemblers are expected to maintain required standards, improve their products and comply with government procurement guidelines.

The BPP chief said the bureau will implement monitoring and evaluation mechanisms to ensure that manufacturers improve their technology, innovation and production standards.

“We have a mechanism called debarment; any assembler violating this principle would be sanctioned in line with the circular and external government guidelines,” he said.

He added that the government will monitor the implementation to ensure that federal institutions comply with the directive while local producers continue to improve the quality of their products.

“We are putting in place a strong monitoring and evaluation system to ensure that assemblers up their game, improve their innovation and technology. We will ensure that all federal government entities support vehicles made in Nigeria,” Adedokun said.

The Federal Executive Council approved the Nigeria First policy in May 2025 to give priority to locally produced goods and services in public procurement.

The latest directive places the automotive industry among the sectors expected to benefit from the government’s local content initiative.

If implemented effectively, the policy could provide local assemblers with a more predictable market, encourage investment in component manufacturing and reduce the government’s reliance on imported vehicles.

However, the success of the initiative will depend on the ability of manufacturers to provide vehicles that meet government requirements at competitive prices, as well as reliable access to spare parts, maintenance services and after-sales support.

The government’s insistence on presidential authorization for foreign-assembled vehicles also makes the availability, affordability and suitability of locally assembled alternatives central to implementation.

Neither the NADDC nor the BPP provided a breakdown of the number of vehicles federal institutions currently purchase each year or the potential value of government contracts that could pass to local assemblers under the directive.

Such figures would help establish the likely extent of the policy’s impact on domestic production, employment and public procurement spending.

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