The blast is suspected to have targeted a police checkpoint at the bus station, near the suburb of Nyanya.
"People in the crowd were saying that a man parked his car, walked away and the next thing they know, the car blew up," said Charles Osueke, a witness to the attack.
A bomb blast killed 70 at the same bus station just last month. No group has claimed responsibility for the attack but the Islamist militant group Boko Haram did claim responsibility for the April bombing.
Thursday's attack comes as the stability of Nigeria is in question. There has been a recent wave of attacks, and more than 200 Nigerian schoolgirls were abducted last month and have yet to be found.
The Nigerian government has insisted that they have the situation under control but many disagree, and members of the international community are considering sending aid to help search for the missing girls.
"I'm worried about our security here. After the last explosion, the president said he would increase security," Osueke said. "There were policemen around when this explosion happened and they didn't manage to stop it."