AUTO POLICY: Lawyer Accuses Auto Sector Operators Of Compromise, Says Duty Should Be Reduced To 20%”

A maritime Lawyer, Mr. Emeka Akabogu has accused players in the Nigerian automotive sector of compromising the 2014 automotive policy. 

Akabogu who said this in a chat with Shipping Position Daily in Lagos last week, explained that big time operators in the sector bring in fully built vehicles under the guise of bringing in Semi Knock Downs (SKD) or Completely Knock Down (CKD) components.

He argued that if players comply with the policy, the automobile sector would have developed more than it is today, even as he charged the government to ensure strict enforcement of the payable duty on SKDs and CKDs.

H said: “What actually happens many times is that many importers under the guise of bringing in SKD parts actually bring in virtually whole vehicles and these are big time operators and these amount to compromising the policy. But if actually they were bringing in CKDs, then the Nigerian auto sector should develop”

“The focus should be on the supply chain which involves the enforcement or implementation of duties for SKD and CKD while at the same time allowing the imported vehicles which are coming into the country to come in”.

According to him, “if you do that dutifully, the result is that it will cause much less for production in Nigeria to happen and consumers are intelligent people who would exercise their choices based on quality and pricing.  So if the ones that are produced locally are cheaper because of the involvement of low duties on SKD and CKD parts than what is being imported, automatically will be of no consequences, because choices will tend towards what was produced locally. That should be the focus and it should be preceded from a very patriotic and deliberate approach”

Akabogu accused the government on focusing more on the 70% of import duty stressing that the policy on promoting indigenous manufacturers are not working.

“What we are doing is that we are not focusing on that, rather we are focusing on 70% import duty which is of no use and which will end up with a double jeopardy. And on the other hand, the policy on promoting indigenous manufacturers is not working. So it is a double jeopardy that is why I disagree on the call for the increment of duty on imported vehicles. That levy should be reduced from 70% to like 20%”

Explaining further, he said that the duty imposed on imported vehicles for the support of Nigerian Automotive Industry Policy has not been useful.

Akabogu called for a slash of duties on imported vehicles and also to implement the zero duty on SKDs and CKDs for the automotive industry to be fully developed.