Stories by Moses Akaigwe
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The Federal Government’s recent ban on the importation of vehicles through Nigeria’s land borders is a commendable measure that, if strictly enforced, would boost the local auto industry and impact positively on the economy.
This was the position canvassed by the umbrella body of automakers in the country, the Nigerian Automotive Manufacturers Association (NAMA), in a statement issued in Lagos in reaction to the pronouncement by government last December. The association noted that the country has been losing a lot of revenue through the use of such entry points by vehicle importers.
Signed by the executive director, NAMA, Remi Olaofe, the statement lauded the Federal Government for holding discussions with stakeholders on the harm being inflicted on the economy through vehicle importation via the land borders, before announcing the ban,
Olaofe argued that importation of vehicles through the land borders constitutes a major revenue leakage for government, because import duties that should have been paid in Nigeria, ended up in the treasury of neighbouring countries.
Olaofe said: “Going by National Automotive Design and Development Council’s report that the level of automotive imports to Nigeria in 2014 was over $5 billion, one can safely project that the imports through our land borders, which are not accounted for by way of duty payment, would be in the excess of $2 billion. This figure translates to over $700 million losses in revenue to the country.
“With the drive towards the full implementation of the national automotive policy (officially, the Nigerian Automotive Industry Development Plan), the place of accurate data cannot be overemphasised. Investors need to be well aware of the size of the market in making investment decisions. The level of damage to our economy both from fiscal and monetary policy perspective is overwhelming when we come to the realisation that the data we plan with is greatly distorted by the unreported imports going through our land borders. This explains why investors, foreign and local, are constantly at a loss when they compare observed market potential with what is officially reported.”
The association also noted that, while it was not surprising to see the pressure being mounted on the upper and lower chambers of the National Assembly by some parties to have the ban reversed, it was worrisome that the legislators would succumb so easily to the moves.
NAMA also allayed the fears being expressed in some quarters about job losses as a result of the policy, saying: “The Federal Government, through the closure of our land borders to vehicle importation, has not placed any ban on the importation of vehicles. Its intervention is to avert the painful activities of smugglers of vehicles through our land borders and loss of revenue to our neighbouring countries and legitimate stakeholders in the auto industry.
“We also consider it paramount to enlighten everyone that inbuilt in the new auto policy are distributors’ schemes, auto finance schemes and an organised second-hand market for locally-used vehicles. We envisage a creation of over 4,000 direct jobs and much higher figures for indirect jobs coming with the policy.
“One is at a loss on why Nigerians would prefer to bring in their vehicles through neighbouring countries, knowing fully well that these vehicles are mostly from America and Europe by sea, why are we unwilling to pay the duties and associated costs to Nigeria but would rather pay to our neighbours?
“We are aware that the National Automotive Design and Development Council and the Nigerian Customs Service are working on a joint scheme to further curtail avoidance of duty payments, especially by smugglers. This scheme, when operational will complement the closure of land borders to vehicle importers and would eventually assist Nigerian Customs in realising duties accruable to government in full.”