Still On The Auto Policy And Influx Of Over-aged Vehicles Into Nigeria

Recent investigations carried out by our correspondents at two biggest vehicle terminals in Lagos; PTML Terminal and Five Star Logistics Terminal, as well as Berger Auto Market Apapa have revealed that 70% of the vehicles coming into the country are in violation of government’s automotive policy

Even though the federal government had in 2010 raised the age limit of vehicles to be imported into the country from 10 years to 15 years, investigations also revealed that the Nigeria Customs Service is deliberately violating this trade policy of the federal government by clearing older vehicles from the ports.

Going by the government directive, vehicles manufactured in 2004 and below are not supposed to be cleared by the Nigeria Customs Service.

Confirming the influx of over-aged vehicles, General Manager of PTML Terminal, Mr Tunde Keshinro confirmed that the terminal is flooded with damaged, ‘accidented’ and relatively low grade vehicles.

He said here have been more of this grade of vehicles since the auto policy came into being.

Keshinro confirmed that importers now bring in low grade, salvaged vehicles, and these are equally older models rather than newer models. He said, relatively, majority of the vehicles being imported were manufactured before 2010.

It is a surprise that rather than see more of newer vehicles of 2013, 2015, 2017 and 2018, what comes in are vehicles that have one defect or the other.

It has also been confirmed that, Customs officers release vehicles of 2003, 2004,

Prior to now, the challenge was that Nigerian importers were using Cotonou port in Benin Republic to smuggle vehicles into the country through illegal routes around Seme and Idiroko borders.

According to statistics released by the National Bureau of Statistics (NBS), a total of 1,216,131 used and new vehicles were imported into the country from 2012 to 2017.

The Bureau, in a report tagged, “Nigerian Ports Statistics, 2012 to 2017”, stated that the vehicles came through, Apapa, Tin Can, Onne, Calabar and Delta ports.

The report showed that vehicle importation into the country nose-dived in 2013, even though the federal government auto policy was introduced in 2014 by former President Goodluck Jonathan, with the aim of boosting local production.

According to the bureau, the policy led to a hike in tariff, leading to a reduction in the number of vehicles brought into the country.

 Sadly, it failed to boost local production but instead fuelled smuggling through neighbouring Benin Republic.

 

From available records, the business of vehicle importation into Nigeria wasn’t very pronounced in Nigeria until the late 1970s when Nigerians started developing tastes for exotic cars.

Between 2000 and 2009, there was an upsurge in the purchase of new cars as banks opened their doors to the middle class who desired new cars; a development which threatened importers of fairly- used vehicles, but it appears that the fear no longer exists as both still enjoy a sizeable chunk of the market.

A deep look into the NBS figures showed that in 2012, 251,322 vehicles were imported while 265,209 in 2013 and 237,904 came into the port in 2014.

It showed further that in 2015, 124,841 vehicles were received at various terminals at Tin-Can port, 104,571 in 2016 and 180,753 in 2017.

The Tin-Can Port was followed by the Apapa port which received 48,937 vehicles in the year under review.

The Apapa port, received 17,121, highest number of vehicles into the country in 2012, followed by 14,397 in 2013 and 9,611 in 2014.

Even though, the Apapa port doesn’t have a designated vehicle terminal, the port recorded 6,955 in 2015 and paltry 346 and 507 in 2016 and 2017 respectively.

The eastern port which was known for receiving oil and gas cargoes also received a paltry 2,594 in six years.

Onne port received the highest in the eastern port from 285 in 2012 to 260 in 2013 and 106 in 2014, 196 vehicles were received in 2015, 272 in 2016 and 3 in 2017.

Delta port received 2 vehicles in 2015 and additional 658 in 2012, 360 in 2013 and 311 in 2014.

The Rivers Port received only 141 vehicles in 2017 while Calabar port received no vehicle in the last eight years.

But, apparently convinced about large scale smuggling of used vehicles and loss of revenue, President Muhammadu Buhari, in December 2016, placed ban on importation of vehicles through the land border.

In between the time that the auto policy was formulated and now, a lot of issues, related to policies and government interventions have come up.

Some of the policy directives have had to do with adjustment and re-adjustment of import duty on categories of vehicles to be imported.

After almost six years of test-running the policy, it is now obvious that a review is necessary. Rather than a reduction in duty or review of the age of used vehicles that can be imported, we call for a holistic review of the automotive policy.

We recall that at the peak of its campaign in 2015, before the general elections, the All Progressives Congress (APC) promised to review the policy. It is instructive that its Vice Presidential Candidate then; Prof YemiOsinbajo pointed said that the policy would not only ne reviewed, but that duty would also be reduced.

The APC has been in power for about four years and it is surprising that it’s at the tail end of its first four years that the kite of reduction is again been flown, by no less a person than the CG of Customs who is a frontier member of the APC and a confidant of  President Muhammadu Buhari.  

It is even shocking to say the least that, the policy does not have the backing of the law. This much was confirmed by the Director-General of the auto policy implementing agency; the National Automotive Design and Development Council (NADDC), Mr Jelani Aliyu.

He said legislating the automotive policy will strengthen it, as well as prevent it from being changed by subsequent governments.

Unknown to many, the auto policy is not just about importation of vehicles. It is more about developing the nation’s indigenous capacity and enhancing the growth of auto assembly plants in the country.

Enacting the law that will legitimize the auto policy will encourage auto manufacturers to continue to increase the level of their investments in the country.  

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