The last may not have been heard on the ban last Monday, by the Federal Government, on the importation of vehicles through the land borders. Since the pronouncement, there have been divergent views, with the House of Representatives urging a stay of action on the ban.
Issues around importation of cars have been old story in Nigeria.
The Goodluck Jonathan administration came up with a new automotive policy that raised the duty paid on imported vehicles from 20 percent to 70 percent, covering 35 percent duty and 35 percent levy, and this took effect in 2014.
The policy, which aimed to discourage importation and increase patronage for locally assembled cars, as Nigeria is yet to join the league of countries manufacturing cars, became counterproductive as many Nigerians who could not afford to buy ‘expensive’ locally assembled cars, abandoned the seaports, and started patronising port in the neighbouring countries of Benin Republic and Togo, where it was cheaper to import and bring into the Nigerian markets through the land borders.
Many investors that built roll-out, roll-off (RORO) terminals, which specialise in handling imported vehicles, were out of business as over 60 percent of their cargoes were diverted to the above mentioned ports. This also led to massive loss of jobs for employees of these roll-roll ports and revenue for the port owners and the Federal Government.
Worried by these loses, the Federal Government last Monday took the decision to ban importation of vehicles through the land borders. The new policy, which was highly welcomed by stakeholders, especially terminal operators under the aegis of the Seaport Terminal Operators of Nigeria (STOAN), was also seen to be ineffective in bridging the already existing gap.
Vicky Haastrup, chairman of STOAN, said the new policy if well implemented by Customs will reduce the smuggling of vehicles into the country and revive the operations of Roll-on-Roll-off (RORO) terminals that handle all types of vehicles, some of which are at the verge of shutting down since the implementation of the new auto policy took effect.
“We are confident of the ability of Mr. President to turn the economy around. The earlier ban on importation of rice through land borders and now of vehicles is a welcome development. We are happy that the President has listened to our appeal to reverse incongruous policies inherited by his government from the former administration and which have deprived Nigerian ports of cargo,” she said.
Haastrup further requested the Federal Government to take a step further and scrap the high import duty regime imposed on vehicles by the administration President Jonathan in 2013.
“In addition to this, we appeal to Mr. President to return the import duties on vehicles to 20 percent from the prohibitive 70 percent tariff imposed by the former administration. The reversal will serve as an incentive for Nigerians to import legitimately through the seaports and make appropriate payments to government. This will boost revenue collection by the Customs and also lead to the return of lost jobs at the affected ports,” she further stated.
While appealing to Customs officers at the border posts to support the Federal Government by ensuring that no smuggled vehicle finds its way into Nigerian market through the land borders from 1st January 2017 when the new policy is expected to come into effect,” Haastrup said.
Asconio Russo, managing director of PTML, Nigeria’s notable Roll-on Roll-off said that his company is in full support of the new policy, which according to him, will increase the revenue of vehicle handling terminals and that of the Federal Government. He however expressed hope for downward review of the duty payable on imported vehicles to spur Nigerians to import through the seaports.
Jonathan Nicole, president of Shippers Association of Lagos State, who noted that since 2014 when the current auto policy that brought about 70 percent hike in the tariff of imported vehicles came into effect, that Nigeria had lost 80 percent of its vehicles to ports in neighbouring countries of Benin republic and Togo, said that Nigeria loses over N800 million annually to the policy.
Nicole further commended the new policy on ban in importation through land borders, even as he added his voice to request the Federal Government to slash the current import duty on vehicles, to increase volume.
Another school of thought believed that if the policy was not well handled, it could be counterproductive, such that it would only become rewarding to corrupt government officials operating at the border posts, who would utilise the situation to prey on Nigerians and jettison national interest.
Tony Nwabunike, former chairman of Council for the Regulation of Freight Forwarding in Nigeria, (CRFFN), who commended the ban, however, expressed fears that corruption among customs officers at the border posts of Seme and Idiroko might make it difficult for the policy to thrive and deliver on its objectives.
The ban, according to him, may end up failing as that of rice has continued to fuel smuggling of rice through the land border for the sole benefit of the importer and corrupt customs officers. “Let me be honest with you, now that government has banned vehicle import through the borders, it is going to be more business for some of the officers at the border, now smugglers would no longer pay N1million to the government any more but themselves alone,” he added.
Noting that except Innosons Motors, there has not been any serious car manufacturer in-county, Nwabunike called on the Federal Government to reduce the tariff on vehicles coming through the ports, to make importation through the seaport very attractive to people.
“It does not make any sense to hold on to high tariff since we have not started producing cars in Nigeria. Government can review the tariff downward and can reintroduce that when we start producing to protect the indigenous companies”, he said.
Importers of vehicles through the land borders were requested to utilise the grace period up till 31st December 2016 to clear their vehicle imports landed in neighbouring Ports. However, the House of Representatives has given a directive to Mr. President to suspend the proposed ban on importation of new and used cars through land borders, due to take off from January 1, 2017.
The lawmakers, who described the policy as “too harsh” owing to the fact that it will add to the economic miseries being faced by Nigerians in this time of economic recession, was prompted by the adoption of a motion by Abdulahi Salame (APC, Sokoto), who was of the view that many Nigerians cannot afford locally assembled cars. He stated that the declined value of naira, inflation, unemployment and high cost of living have forced over 80 percent of the population to live below $200 a day.
“It is worrisome that the ban will cause more harm than good as it will certainly lead to increased smuggling, deprive poor Nigerians of access to acquiring vehicles, skyrocket the price of cars cleared at the wharf, increase inflation and further mount pressure on the already weak naira and lead to idleness, insecurity and criminality at the border points”.
The Federal Government, according to him, has not put alternative measures in place to ensure that Nigerians have access to affordable cars. Buttressing his point, Salame said, similar policy on importation rice has brought hardship on Nigerians as a bag of rice now goes for between N20, 000 and N23, 000 as against N8,000 few months ago. “These policy makers have failed to patronise made-in-Nigeria goods, especially Nigerian assembled vehicles which is unaffordable to over 80 percent of Nigerians.”
Before the motion was unanimously adopted, lawmakers also argued that the ban was against the Economic Community of West African States (ECOWAS) Protocols on movement of goods and services within the states.
Countering the argument of non-payment of duties, as responsible for the ban, the House argued that such was not enough to punish the entire country, given the fact that such illegal act is done in connivance with corrupt government officials at the border posts.
In addition to this, the House urged the Federal Government to ensure that the agencies at the border posts are diligent in their duties and that they ensure that import duties are paid and remitted to the government. The House committees on Governmental Affairs and Customs and Excise, were mandated to see to the execution of the resolutions.
AMAKA ANAGOR-EWUZIE
