Ahead of the January 2015 take off of the national automotive policy, the Nigerian Association of Chambers of Commerce, Industry Mines and Agriculture (NACCIMA) has warned that the short moratorium period given for the effective take-off date of the automotive policy poses severe threat to the economy.
Ahead of the January 2015 take off of the national automotive policy, the Nigerian Association of Chambers of Commerce, Industry Mines and Agriculture (NACCIMA) has warned that the short moratorium period given for the effective take-off date of the automotive policy poses severe threat to the economy.
President, NACCIMA, Alhaji Mohammed Abubakar said, the policy, when fully implemented, would lead to fall in demand of imported used vehicles, which invariably, will affect the transportation sector, erode the welfare of the citizens by reducing their purchasing power. He also warned that it could breed unnecessary monopoly and also result in increase in unemployment.
Abubakar made the statement while presenting the NACCIMA state of the nation report in which he stressed that the implementation of the sharp increase in import duty on fully built vehicles to 70 per cent from 22 per cent will place the cost of vehicles beyond the reach of about 90 per cent of Nigerians, increase the cost of transportation by at least 50 per cent, increase inflation level and also create huge gap between demand and local supply capacity of automobiles due to infrastructural challenges.
He said the need to further extend on implementation date has become necessary to enable stakeholders resolve the lingering controversies generated by the policy and reach a consensus on how to effectively implement the policy for the benefit of the sector’s investors and the economy at large.
“Having reviewed the lingering controversies between government and auto industry stakeholders on the implementation take-off date of the new auto policy in Nigeria, the chamber wishes to add their voice by expressing some concerns on the short moratorium period given on the effective take-off date of the policy.
According to him, “NACCIMA believes that the implementation of the sharp increase in import duty on fully built vehicles to 70 per cent (35 per cent duty + 35 per cent levy) from 22 per cent (20 per cent duty + 2 per cent levy) will place the cost of vehicles beyond the reach of about 90 per cent of Nigerians, increase the cost of transportation by at least 50 per cent, increase inflation level and create huge gap between demand and local supply capacity of automobiles due to infrastructure challenges”.
“Today supply stands at a pathetic 45,000 units while demand stands at 800,000 units per annum), smuggling activities from neighbouring countries will boom, especially from Cotonou Port with imported vehicles still dominate the market place (since we have about 1,400 illegal entry routes, over 80 poorly manned borders and an yet to be fully-equipped Customs structure, etc),” he added.
He said: "To ensure that the good intention of government on this policy initiative becomes a reality, if well harnessed and implemented, we counsel that there is need for the federal government to put its house in order before commencing full implementation of the policy. This is because it is capable of further encouraging diversion of cargoes to neighbouring countries if it is not halted to allow for sufficient moratorium period be given to auto industry operators and stakeholders."
Abubakar added: "We wish to reiterate our earlier position that the new auto policy implementation take-off date should be extended to at least March 2015. We urge the federal government to further dialogue with all stakeholders amidst the lingering controversy over a new automotive policy and reach a common consensus on how effectively to implement the automotive industry policy with adequate concessions and incentives to manufacturers that will enable the policy play both strategic and catalytic roles in economic development, job creation and wealth creation."
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