The Automotive Policy And Importation Of Used Vehicles Into Nigeria

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

Our investigations at the two biggest vehicle handling terminals in Lagos; that is, PTML Terminal and Five Star Logistics Terminal, as well as Africa’s biggest automobile market; Berger Auto Market in Apapa have revealed that 70% of the vehicles coming into the violate 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 2006 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 2008.

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

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 data obtained from the foreign trade reports, Nigeria recorded the sum of N1.28 trillion as the value of imports for used vehicles and motorcycles between Q3 2019 and Q2 2020, compared to N899 billion recorded in the corresponding period (Q3 2018 – Q2 2019), implying an increase of 42%.

Similarly, 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 that were imported into the country.

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

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.

The story of Ghana which embraced the same policy long after Nigeria is a clear departure from our experience as a nation.

The Ghanaian auto policy has not only brought auto makers into the country, it has also reduced the age limit of vehicles to be imported into Ghana.

The automotive policy the Ghanaian government had put in place will effectively rapidly phase out used car importation over the next three years.

The case with Nigeria is a clear departure from a viable and attractive automotive policy.

It is even shocking to say the least that, the Nigerian auto 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.

Policy directive on importation of used vehicles into Nigeria smirks of inconsistency, un-seriousness. It is a direct negation of the auto policy. It is even now more apparent that the auto policy has been jettisoned tactically by the present administration.

This is because there is a new law signed by President Muhammadu Buhari, that is the Finance Bill, 2020, which stipulates a downward review of excise duty on tractors and motor vehicles for transportation.

We think that rather than the present reduction in duty payable on used vehicles, the Federal Government should rejig the almost nine-year-old national automotive policy

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.

This will clearly specify the age limit and type of used vehicles that can be imported into Nigeria. It is a shame that while some smaller African nations are already placing a ban on importation of used vehicles, Nigeria is opening her borders to all manners of scraps in the name of used vehicles.