Fuel Subsidy Is Dead: Nigeria's Next Big Move Is Vehicle Credit, and It's About Time

Nigeria is at a crossroads. The fuel subsidy era is over, and the big brains at the Lagos Chamber of Commerce and Industry (LCCI) have dropped a bold new playbook: stop subsidising what we consume, start financing what we own. At a symposium in Lagos on Thursday, September 17, 2026, industry heavyweights made it crystal clear that the future of Nigerian mobility isn't cheap petrol, it's affordable credit and local production.

Why Nigeria Must Ditch Subsidy for Vehicle Financing

For decades, the fuel subsidy quietly acted as Nigeria's unofficial mobility policy. It kept transport costs low for millions, from danfo drivers to market women and small business owners. But here's the problem: cheap fuel never made cars cheap. Only the wealthy could actually own the productive assets that generate income.

Dr Femi Eguaikhide, Chairman of the LCCI Auto and Allied Sector Group, put it bluntly:

“Subsidy made fuel cheap, but cars remained expensive. So only the rich owned productive assets.”

Since the subsidy was removed in May 2023, transport fares have skyrocketed, pushing up the cost of everything from food to services. The old model is gone. The new question is: what replaces it?

Can Vehicle Credit Work for the Average Nigerian?

Eguaikhide believes the answer is yes, but only if the system is built around how Nigerians actually earn. He's pushing for single-digit interest rates and longer-tenor lease-to-own schemes for commercial operators. Think buses, tricycles, and okadas.

His vision is practical, even street-level:

“Can we create a ₦50,000/month plan for a keke driver?”

That's the kind of thinking that meets people where they are. He also floated the idea of using vehicle telematics and cash-flow data to build “mobility credit scores,” so lenders can trust commercial operators who might not have traditional bank records.

No More Tokunbo: Credit Must Fuel Local Production

Here's where it gets serious. Eguaikhide warned that vehicle financing must not become a backdoor for flooding the country with more imported used cars. His words hit hard:

“If we use credit to import more Tokunbo, we've solved nothing.”

Instead, he's championing financing for CNG conversions, locally assembled electric and hybrid vehicles, and mass-transit buses. The goal is simple: turn consumption into production. As he summed it up,

“Subsidy gave us consumption. Credit can give us production.”

The National Automotive Bank: A Game Changer in the Making?

Chief (Sir) Anselm Ilekuba, Chairman and CEO of Cedric Masters Group, threw his weight behind a major new initiative: the proposed National Automotive Bank, championed by the National Automotive Design and Development Council (NADDC).

Represented at the event by Christabel Mmesoma Ilekuba, the company's CFO, he called out the harsh reality of high financing costs and short repayment periods that have locked ordinary Nigerians out of vehicle ownership, despite massive demand.

The Automotive Bank would be a specialised financing platform for consumers, vehicle assemblers, and component manufacturers. Ilekuba wants longer-tenor loans for locally assembled vehicles, plus industrial credit for manufacturers to expand capacity, upgrade machinery, and get proper certification.

Local Components, Global Confidence: The ALCMAN-China Partnership

Ilekuba also pushed for deeper localisation of automotive parts, pointing to the proposed National Automotive Components Parts Gateway being developed by ALCMAN with Chinese partners. This isn't just about assembling cars in Nigeria; it's about making the parts here too.

He painted a clear picture of the ripple effect: more vehicle purchases lead to higher local production, which creates component demand, which generates jobs, which reduces our exposure to foreign exchange volatility. That's a cycle of prosperity, not dependency.

What Success Looks Like for Nigeria's Automotive Industry

For Ilekuba, success isn't just about how many loans are handed out. It's about measurable growth: increased local assembly, more component production, factory expansions, new jobs, and foreign exchange conserved or earned.

His closing statement captured the entire philosophy:

“The old subsidy helped Nigerians consume mobility. The new approach should help Nigerians own mobility — and help Nigeria produce it.”

Frequently Asked Questions

What is the National Automotive Bank?

The National Automotive Bank is a proposed specialised financing platform championed by the NADDC. It aims to provide affordable credit to vehicle buyers, assemblers, and component manufacturers to boost local automotive production and ownership.

How would vehicle financing work for commercial drivers?

The LCCI proposes lease-to-own schemes with single-digit interest rates and longer repayment periods. Plans could be tailored to earning capacity, like a ₦50,000 monthly payment option for keke drivers, using telematics and cash-flow data to assess creditworthiness.

Why is local production important in vehicle financing?

Financing imports would only repeat the old cycle of dependency. By financing locally assembled and CNG or electric vehicles, Nigeria can build its industrial base, create jobs, and reduce foreign exchange pressure.