AUTO POLICY

•         Policy May Start January , 2014
•         But ANLCA, NAGAFF call for cancellation of policy
There are strong indications that come 2015; vehicles that are more than five years old may no longer be imported into Nigeria.
The proposal, which will be the last leg in the implementation of the controversial Federal Government‘s automobile policy is already being considered at the highest level of government.

•         Policy May Start January , 2014
•         But ANLCA, NAGAFF call for cancellation of policy
There are strong indications that come 2015; vehicles that are more than five years old may no longer be imported into Nigeria.
The proposal, which will be the last leg in the implementation of the controversial Federal Government‘s automobile policy is already being considered at the highest level of government.
Our correspondent confirmed last week that, the decision to extend the collection of 35 per cent levy on imported used vehicles was to allow sufficient time for agitations over the policy to die down.
The revelation came on the heels of last week affirmation by the National Automotive Council (NAC) that, government had granted a further six months extension from the June 30, 2014 deadline.
But it also coincided with a call by two leading freight forwarding associations in Nigeria, that the auto policy should be suspended in totality.  
In a jointly signed statement titled “Auto Policy: Suspending an Unpopular Policy”, the duo of Association Of Nigerian Licensed Customs Clearing Agents (ANLCA) and the National Association Of Government-Approved Freight Forwarders (NAGAFF) insisted that the auto  policy is damaging to the economy and injurious to the Nigerian populace.
 
In the statement that was jointly signed by the associations national secretaries; Oparah Emma Ogu for ANLCA and Increase Uche for  NAGAFF, they alerted that, “latest developments indicate that Nigerian vehicles importers have started shipping their imports to Cotonou and other neighbouring ports from where they will certainly find their way into Nigeria through porous borders”.
 
By the act, Government stands to lose an estimated N23.5b annually to other countries, due to a hurried policy implementation, the associations added.
 
“Implementation of the 70 per cent tariff hike will also aggravate the high rate of smuggling of imported vehicles into the country as importers will become more daring. This will overstretch the officers and men of the Nigeria Customs Service who are already distressed in their efforts to combat smuggling across the nation's numerous porous borders. Collusion between smugglers and border security agencies is forecast and estimated to generate another N2.45b into private pockets due to hurried policy implementation”, they added.
 
 They also called the attention of government to the fact that the policy would encourage exemption racketeering, and warned that an estimated N2billon would be wasted on exemption rackets due to hurried policy implementation.
 
Calling for a five -year gestation period for the policy to come into effect, ANLCA and NAGAFF, maintained that “considering the unpopularity of the implementation of the new tariff structure under the automotive policy and the multiple odds against it, we hereby once again call on the government to suspend the implementation temporarily and review the infrastructural deficits that would choke the policy in infancy”.
 
But, in announcing the extension of collection of levy on used vehicles to January, 2015, the NAC had confirmed that the vehicle manufacturing plants did not have the capacity to meet local demand for vehicles. It also added that, government was putting in place a credit scheme that will allow Nigerians to buy vehicles with loans sourced from banks at reasonable interest rates. The same reasons were given by the Minster of trade and investments; Dr Olusegun Aganga.
However, Shipping Position Daily gathered that, auto manufacturers may have convinced both the NAC and the Minister of trade that the only way to make the locally assembled vehicles attractive to Nigerians is by making imported ones costlier.
Presently, the law allows 15-year old vehicles to be imported into the country.
But, an official of NAC who pleaded anonymity hinted our correspondent last week that, “the five –year age restriction will come into effect side-by-side the the January date for 35 per cent duty on used vehicles, it is meant to encourage the local assembly plants”.