This year, Nigeria experienced a significant shift in its transport and automotive industries, driven by policy reforms, investments, and substantial budgets for road, water, and rail projects, which have impacted how people and goods move across the country.
Despite its critical role in supporting economic activities, Nigeria’s transport sector faced major hurdles in 2025, including poor road networks, rising operational costs, policy inconsistencies, and the continued underutilisation of its rail and inland waterways.
These challenges contributed to the sector’s sluggish growth, as Nigeria continues to operate with poorly integrated transport networks that drive up the cost of doing business.
Nigeria’s transport sector growth slowed to 9.87 percent in the third quarter (Q3) of 2025, according to data from the National Bureau of Statistics (NBS).
The sector’s growth declined by 0.23 percent year-on-year to 9.87 percent in Q3 of 2025 from 10.10 percent in the corresponding quarter of 2024, as infrastructural bottlenecks continue to weigh industry performance.
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In no particular order, here are trends that shaped Nigeria’s transport sector in 2025.
Lagos-Calabar coastal highway
The Lagos-Calabar Coastal Highway is a 700km project designed to connect Lagos to Calabar, passing through nine states: Ogun, Ondo, Edo, Delta, Bayelsa, Rivers, Akwa Ibom, and Cross River.
It is one of the largest road infrastructure projects in Nigeria’s history, costing N7.5 billion per kilometer, envisioned to enhance trade activities, spur industrialisation, tourism, improve logistics, and develop coastal economies.
The government set a target of completing the first phase by late 2025, with formal completion of larger sections slated for January to April 2026.
Rise in used car sales
The state of the economy and its volatile naira made imported foreign used cars, also known as ‘Tokunbo,’ expensive for Nigerians. Due to the surge in the price of imported cars, the local used car market boomed, making more private owners sell their vehicles, and buyers increasingly turning to pre-owned Nigerian vehicles as an affordable alternative.
This shift made car ownership, once seen as a liability, now an asset.
Car dealers attributed the rising cost of used cars in the country to foreign exchange rates and import duty charges.
Oluwafemi Ogunbadejo, a car dealer and CEO of World Claw Automobile, told BusinessDay that as the naira weakens, both the purchase cost and import duty for foreign used cars (Tokunbo) become significantly higher.
A report by Cowrywise, entitled ‘The Economics of Car Ownership in Nigeria,’ also says that while a car loses its intrinsic value through depreciation, its replacement value in Nigeria can increase over time.
The report classifies cars as consumable assets that depreciate and do not generate income, but their resale value in naira can effectively soar due to the weaker currency and inflationary pressures.
“Despite depreciation, replacement value can offer partial upside,” the report states, noting that the annual increase in replacement value of a car is N1.73 million per year and N144,473 per month.
“This means that although a car loses intrinsic value through depreciation, it may still command a higher replacement cost over time, making it a partial hedge against inflation,” the report adds.
Read also: Nigeria’s transport sector growth slows to 9.87% in Q3
CNG/electric vehicles
In 2025, there was a growth in the adoption of electric and CNG vehicles driven by the push for cleaner, more sustainable, and efficient mobility.
According to Climate Scorecard, EV adoption in Nigeria is growing fast, with an estimated 15,000 to 20,000 vehicles on Nigerian roads in early 2025.
The EV trend grew beyond cars, then moved to bikes and three-wheelers, crucial for urban mobility and last-mile transport.
However, costs became higher and charging infrastructure remained limited, as frequent power outages constrained the reliability of users, thereby slowing adoption in the country.
Another major development in the electric mobility industry in 2025 was the Electric Vehicle Transition and Green Mobility Bill, which advanced through the Nigerian Senate to a second reading, a key step toward national legislation that could provide incentives, mandates, and fines to regulate the EV market.
Free-on-Board (FOB) levy
In early 2025, the Nigeria Customs Service announced the implementation of a four percent Free-on-Board (FOB) charge on all imports, including vehicles.
The levy is a customs charge, calculated based on the value of imported goods, including transportation costs up to the port of loading.
It was intended to replace older import-related fees and help fund customs operations and modernisation efforts.
This levy was supposed to streamline multiple fees (like the one percent Comprehensive Import Supervision Scheme), but in practice was being collected in addition to existing fees, increasing costs for importers.
Stakeholders, including manufacturers, car dealers, and business groups, argued that the levy would raise import costs for raw materials and equipment, worsen inflationary pressures, and hurt economic competitiveness.
After months of pushback, the federal government suspended the levy in September 2025 to allow for a full review of its implementation and economic impact.
Read also: Reforming Nigeria’s Transport Sector: Bridging the Gap Between Vision and Reality
Derailment of railways
This was a recurring issue in Nigeria’s rail service in 2025, exposing the maintenance and safety gaps on the tracks and undermining confidence in rail as a safe alternative to road travel.
According to data from the National Bureau of Statistics (NBS), Nigeria has recorded 188 train derailments between 2020 and 2025, reporting 183 incidents between 2020 and 2022 alone, of which 2020, 2021, and 2022 had 57, 61, and 65, respectively, making derailments the most frequent form of railway accidents in recent years.
Omi-Eko project
The Lagos State Government launched the Omi Eko Project this year, a €410 million (Euro) initiative aimed at transforming Lagos’ inland waterways into a world-class transportation system.
The project plans to ease traffic congestion, improve mobility, and promote sustainable transport across Africa’s most populous city.
Backed by the Global Gateway Initiative, the Omi Eko Project is jointly financed by the French Development Agency (AFD), the European Union (EU), the European Investment Bank (EIB), and the Lagos State Government.
Read also: Unexplained fare hikes unacceptable, FCCPC cautions road transport operators
National land transport policy
In 2025, the Federal Executive Council (FEC) approved the first‑ever National Land Transport Policy to create an integrated, safe, efficient, and sustainable land transport system across the country, aligning with broader economic and infrastructure goals.
The policy aims to promote cleaner energy, climate-friendly mobility, and accessible infrastructure for all, focusing on better infrastructure, technology, and regulations to reduce accidents, moving towards private sector-led service provision with the government setting standards.
