In this interview with Shipping Position Daily newspaper’s correspondent; Roland Ekama, an automobile importer and Chairman of Popson Park, a sub-let of Berger International Automobile Market; Mr Moses Ilima talked about the current challenges facing sale of fairly-used cars imported from Republic of Benin to Nigeria and how issues of Forex are affecting the business of used vehicle importation and sale. He also spoke about the Naira vs Cfa tango.
Kindly tell us about the issue of exchange rate and how it has hampered the business of importation of fairly-used vehicles?
There is no gain saying that it has affected our business because naturally we don't manufacture these cars in Nigeria, rather they are imported into this country. Automatically, the Forex is going to be high definitely and it will affect our prices here at the market and as we speak it has indeed affected our prices, which is a known fact.
How then do the dealers cope, despite the situation?
As someone who has been in the business for so long, we are managing the situation. As somebody who is a retailer, we are between importing and selling of cars to the end users thus we actually sell according to how we buy and that is the truth.
What are the current prices of cars, when compared to last year?
It still depends on the exchange rate. For example Lexus 330 RX, the one with reverse camera which has 2004 to 2006 models starts from N3.25Million to N3.3Milion but now, this is October 2016; we sell from N4.2Million because of the exchange rate. During the period you talked about dollar was N220 to N250, but as we speak a dollar is almost N500; the vehicles are obtainable everywhere aside this park. The prices will definitely increase knowing fully well that exchange rate determines the sales of vehicle used cars imported into the country.
Despite the situation on ground, is it proper to say that sale of vehicles at the market is low?
The facts still remains that people who are in need of cars will always come to us and buy. People need automobile because it’s a necessity, people will always buy cars to move around, so there is no way they cannot but vehicles from us. However, we try as much as possible as responsible citizens of this country to make sure that we don't over -inflate our prices because of the economic downturn we find ourselves and that is the truth; because if we are to go by that, then the same vehicles I told you is selling for N4.2Million would go for N4.5Million by now. The issue on ground does affect our business and it has also affected our profit margin. What we are doing now is just to keep body and soul going, nobody is making profit to say I want to build a house or buy properties as a car dealer; rather what we are doing is how our family can survive as a man and that is what we are doing here.
It appears Berger vehicle dealers buy most of their vehicles from Cotonou?
We use to clear our vehicles from neighbouring countries because we wouldn't have any problem with dollar ordinarily, because we don't talk about dollars here rather it is Cfa we are dealing with because we have the market there and those Lebanese who import their vehicles from America and Europe basically target Nigerians market, nobody can tell you this but that is the truth. Though we go there to buy, we change our Naira to Cfa but as we speak Cfa now is something you can't even think about and that is why some of us have resolved to source for vehicles locally and since the beginning of this year, I have not gone to Cotonou to buy cars and that is why we are still breathing in Nigeria because the Naira is being circulated among few Nigerian importers here in Nigeria. I can tell you that about 95% of the car dealers at Berger Market no longer patronise Cotonou market in purchase of fairly used cars.
Are you saying that now Nigerian dealers and importers patronise Nigerian ports for the purpose shipping in their automobiles?
Yes they do; after this interview just look around and find out for yourself because the stickers that indicates Lagos ports are displayed on the vehicles which I can say is a practical example of cars that are cleared from Nigerian seaports. What we are doing at the moment is that we patronise Nigerian importers who clear their vehicles from Nigerian ports, basically because of the situation we are faced with at Cotonou. Instead of patronising the Lebanese car dealers in Cotonou we just have to do business with our own people.
Kindly explain in clearer terms the issue between the Naira and Cfa as regards importation of fairly used cars from Benin Republic?
Now, Cfa is also controlled by dollar and don't forget that the neighbouring countries, especially Benin Republic are the ones that use Cfa. Before you will go there to buy vehicle; you have to change your Naira to Cfa and as I am talking to you now, Cfa is about N800 to Cfa 1000. Usually, it was around N250 to N300. Thus going to Cotonou is a waste of time and resources; which is therefore unfavourable to us. Even it used to be N100 to a Cfa1000, but today you can imagine the sudden rise of Cfa.
What might have led to the sharp increase in the value of the Cfa?
It is because when you buy in Benin Republic which is a sovereign state, you have to clear from there and pay duty. As a responsible citizen of the country you will also pay duty at the Nigerian borders which makes it double taxation. Therefore it is better for us to go to a man who pays only one duty here in Nigeria and patronise him. This is one major reason people can still afford to buy cars now; otherwise it would have been impossible for people to buy cars because of the recession.
What is your view about smuggling of vehicles to Nigeria despite the CBN policy on Forex?
I wouldn't know about that because I am not a smuggler but naturally, this would actually promote smuggling, smuggling will thrive, it will influence smuggling but I don't know about that because I don't patronise smuggled vehicles. Beside, our Nigerian importers are lamenting duty payable in our ports because it has skyrocketed astronomically and it’s not the best way to encourage international trade. It is a known fact that Nigerian importers are patronising neighbouring countries; but naturally, when the duty is high here in Nigeria it becomes a problem. Only the duty on surcharge alone on vehicles like Lexus is N76 ,000 from Nigerian ports and this is what we are faced with in this business.
From a professional stand point, what is the best way out of the situation?
The best way out is very simple; just like what Benin Republic is doing and I think we should also borrow a leaf from them. What they did is that because they know that their import base is targeted at Nigerians, therefore they reduced their clearing charges just to attract Nigerian importers and we want the government to look into that direction to attract our own importers who patronise ports of other countries. It’s all about common sense, just think about why our tariff is higher when compared to others, and then put in place measures to attract your own people – simple. If the government can do that then automatically address issue of Naira, Cfa and Dollars that we are crying foul about and the economy will grow and the currency will have value as well.
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