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From Fred Ezeh, Abuja
The Economic and Financial Crimes Commission (EFCC) has raised concerns over the proliferation of automobile dealerships across Nigeria, warning that car lots could be exploited as channels for money laundering and other illicit financial transactions unless stricter regulatory and monitoring mechanisms are introduced.
The anti-graft agency consequently called for stronger provisions in the proposed National Automotive Industry Bill 2026 to regulate the operations of automobile dealers, strengthen financial compliance and prevent the sector from being used to conceal proceeds of crime.
The commission raised the concerns at a stakeholders’ engagement on the draft legislation organised by the National Automotive Design and Development Council (NADDC) in Abuja yesterday, where representatives of government agencies examined regulatory gaps and measures required to reposition the country’s automotive industry.
Speaking on behalf of the EFCC, its representative said the increasing number of automobile dealerships and car stands across the country had made closer supervision necessary, particularly because automobile businesses fall within the category of Designated Non-Financial Businesses and Professions (DNFBPs), which are subject to anti-money laundering regulations.
He explained that inadequate supervision of such businesses had been among the weaknesses identified in Nigeria’s anti-money laundering and counter-terrorist financing framework, stressing that the proposed legislation provided an opportunity to strengthen oversight and close existing regulatory loopholes.
The EFCC representative drew attention to Nigeria’s removal from the Financial Action Task Force (FATF) grey list, noting that weaknesses in the regulation and supervision of DNFBPs had contributed to the country’s previous listing.
He warned that failure to strengthen compliance mechanisms could expose the country to renewed international scrutiny, particularly as the automotive sector continued to expand without corresponding improvements in regulatory oversight.
“If you go outside Abuja alone, you see almost every nook and cranny is a car lot. And then we have seen it that this is obviously money laundering,” he said.
The commission urged NADDC to incorporate appropriate provisions into the proposed bill to ensure that automobile dealers operated within a clearly defined regulatory framework capable of identifying suspicious financial transactions and preventing the use of car dealerships for illicit activities.
According to the representative, effective regulation would not only strengthen transparency and accountability in the sector but also support Nigeria’s compliance with international obligations relating to the prevention of money laundering and terrorist financing.
He assured NADDC of the EFCC’s readiness to collaborate in developing appropriate safeguards and enforcement mechanisms, while commending the council for initiating the legislative review.
The proposed National Automotive Industry Bill 2026 seeks to repeal the existing NADDC legal framework and establish a National Automotive Development Commission with expanded regulatory oversight and enforcement powers.
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Director-General of NADDC, Oluwemimo Osanipin, said the proposed legislation was designed to address longstanding challenges confronting Nigeria’s automotive industry, including policy uncertainty, enforcement bottlenecks and gaps in the existing legal framework.
Osanipin explained that the capital-intensive nature of automobile manufacturing required a predictable policy environment and stronger institutional arrangements to attract and sustain long-term investments.
He noted that developments in automotive technology, particularly the growing adoption of electric vehicles and compressed natural gas-powered vehicles, alongside changing global manufacturing trends and regional trade arrangements, had made a comprehensive review of the industry’s legal framework necessary.
According to him, the proposed commission would be better positioned to coordinate industry development, strengthen regulatory compliance and provide the institutional support required to improve local vehicle assembly and manufacturing.
The NADDC director-general urged ministries, departments and agencies participating in the engagement to identify areas of possible regulatory overlap and contribute proposals that would ensure the legislation reflected a coordinated, whole-of-government approach to automotive development.
He stressed that effective collaboration among relevant institutions would be essential to creating an enabling environment for investment, technology transfer, employment generation and sustainable industrial growth.
The Nigeria Customs Service (NCS), represented by Assistant Comptroller Joseph Atile of its Tariff and Trade Department, pledged support for the proposed legislation, assuring that the service would collaborate with NADDC on trade facilitation, compliance enforcement and fiscal measures designed to encourage local automobile assembly and manufacturing.
Atile said a stronger legal and regulatory framework would help improve the competitiveness of the automotive industry, promote export opportunities and support the government’s industrialisation objectives.
He maintained that effective implementation of the proposed legislation could contribute to employment generation, technology transfer and the development of domestic manufacturing capacity.
Similarly, the Federal Road Safety Corps (FRSC), represented by Kunle Oguntoyinbo on behalf of the Corps Marshal, called for stronger provisions addressing vehicle safety, roadworthiness and environmental sustainability.
The FRSC representative stressed that automotive industry development should not be limited to vehicle production and commercial considerations but must also prioritise the safety of road users and the protection of human lives.
He reaffirmed the Corps’ commitment to supporting policies and regulatory measures that would promote a safe, efficient and globally competitive automotive industry.
Participants at the stakeholders’ engagement expressed optimism that the proposed legislation, strengthened by contributions from relevant government agencies, would address existing regulatory challenges and provide a more effective framework for the sustainable development of Nigeria’s automotive sector.
