From available records, the business of vehicle importation wasn’t very pronounced in Nigeria until the late 1970s when Nigerians started developing tastes for exotic cars.
But, 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.
Perhaps acknowledging the status of Nigeria as a vehicle-importing nation, but determined to address this, then-President Goodluck Jonathan said at the World Economic Forum which held earlier in 2014 in Davos, Switzerland that : “The only way to reduce the preponderance of second hand cars on our roads is to produce good quality cars with affordable pricing locally”.
At the forum which also had in attendance some leading automobile manufacturers, the former President left no one in doubt that Nigeria’s National Automotive Policy has come to stay. He stated also that the objective of the new policy is to make new cars affordable to more Nigerians.
Nigeria’s market for new automobile is dominated by most of the global brands like: Toyota, GM, Nissan, Honda, BMW, Audi, Mercedes, Hyundai, Kia, Volkswagen, Skoda and a host of others.
In the new cars segment, the market leaders are Stallion Group (owned by the international billionaire businessmen; the Vaswani Brothers that holds the exclusive sole representations for prime European, Japanese and Korean brands. But, in the used vehicle genre, brands like, Toyota and Honda are hot favourites.
In between the time that the auto policy was formulated and now, a lot of issues, related policies and government interventions have come up.
Some of the policies directives have had to do with adjustment and re-adjustment of import duty on categories of vehicles to be imported and recently, the Nigeria Customs Service (acting on the orders of the Government) directed that as from January 1, 2017, importation of vehicles into the country through land border is prohibited.
There have been agitations about the plight of importers whose vehicles were trapped at the Seme border enroute Nigeria from Cotonou port in Benin Republic, to beat the March 31, 2016 deadline. The trapped vehicles were destined for Nigeria, but transhipped through Cotonou port.
Expectedly, importers and clearing agents at Seme Border and beyond have raised alarm over the plight of these vehicles, and they have requested for a three months grace period to enable them clear the backlog.
On its part, the Customs have said that there is no going back on the implementation, even as the Senate has called for a suspension.
Prior to the ban, Nigerian importers had complained that the dwindling exchange rate of the Naira to the Francophone countries’ CFA has made bringing in cars through Cotonou unprofitable. Why then do we have this cry about shutting our borders against importation of a particular product through Cotonou or any land border?
We are quite aware that Customs at Seme border will lose revenue, because a large chunk of its revenue comes in through duty and other payments on imported vehicles. A similar fate befell Nigerian Ports Authourity (NPA) when the border enjoyed preference, especially in importation of rice and vehicles.
It is noteworthy that, the National Association of Government Approved Freight Forwarders (NAGAFF) is the only body that has so far expressed support for the ban.
The National Publicity Secretary of the association, Mr Stanley Ezenga, said last week, that the association`s support was borne out of the economic benefits that the policy would bring to the nation.
The association said last week that it fully supported the policy. “We support the new policy to ban vehicles through the land borders in its entirety because of the obvious economic benefits to the nation.
“First, activities are at their lowest ebb at the various ports due to diversion of cargoes to ports in neighbouring countries and we believe the policy will make our ports busy as vehicles will now have to come in through the ports.
“Also, there is the government`s Auto-Policy in place designed to encourage local capacities in the manufacturing of vehicles.
“So we believe the policy would prevent dumping and smuggling through better monitoring,’’ he said.
We are however worried about the porous nature of Nigeria’s border with her neighbours. The reality is that dare-devil smugglers will exploit these illegal routes. It is most likely that, smuggling will henceforth be on the rise.
We are convinced that the decision to ban importation of vehicles through land border is very unpopular among most Nigerians.
It is pertinent to ask at this point, if the auto policy taken-off.The full take-off date has been delayed due to a combination of factors.
We agree that a fully functional automotive policy will no doubt lead to gainful employment for many Nigerians. This is more so since the government is planning to create automotive clusters in Ogun and Lagos States, Kano and Kaduna States, Enugu and Anambra States.
However, the greatest problem in the implementation is the silence on the part of the government; the policy appears not to be a priority of the present administration of President Muhammadu Buhari. Otherwise, how can one explain the fact that there has been no mention of it since May 2015 when the present administration came in?
But again, some have argued that, there are indeed no alternatives to importation of used vehicles. We disagree and maintain that here are, as evidenced by the vehicles that are now being assembled by a few of the auto assembly plants.
However, our major concern is the immediate effect of the policy, especially when the collection of 70% tariff starts.
Certainly, importation will drop, and it has started dropping already going by what stakeholders have said.
Even though not yet fully implemented, the effect is already being felt by stakeholders. For instances, Managing Director of Nigeria's biggest vehicle importation handling terminal, the Port and Terminal Multiservices Limited (PTML); Mr Ascanio Russo confirmed recently that the policy has affected the importation of vehicles into Nigeria by as much as 50%.
More worrisome is that he confirmed that many of the vehicles that should ordinarily pass through the terminal are now coming into Nigeria through Cotonou port and that Grimaldi in Cotonou is making money while its counterpart in Nigeria is losing money.
There is suspicion that the ban on importation of vehicles through land border is made to favour some interests, and that is where our fear lies. We hope this is not true, because if truly it is true, then this not the way to go.
The current policy on ban may be a well-thought-out one aimed at diverting Nigerian-bound vehicles into the country through the ports. But a holistic policy directive on the auto policy is more desirable.
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