FG’s ban on vehicle importation

FROM this month onwards, importation of vehicles through Nigeria’s land borders will be impossible. This followed a new prohibition order issued by the Federal Government in December. The Nigeria Customs Service (NCS) announced the ban following a presidential directive restricting all vehicle imports to the seaports with effect from January 1, 2017. In the statement signed by its then spokesman, Wale Adeniyi, the NCS had advised those importing vehicles through the land borders to utilise the grace period, ending on December 31, 2016, to clear their vehicles in the ports of neighbouring countries. The government’s action followed the precedent it laid in April 2016 when it stopped the importation of rice through the country’s land borders.
According to the Director-General, National Automotive Design and Development Council, Mr. Aminu Jalal, the policy was a means of controlling the influx of used vehicles, also known as Tokunbo, into the country. The government’s decision came in the wake of the outcry by stakeholders in the automotive industry that that poor implementation of the auto policy introduced in the last quarter of 2013 by the Goodluck Jonathan administration, namely the imposition of 70 per cent tariff on all imported cars, was having adverse effects on the volume of their products. Contrary to the 2013 auto policy, the government had restricted the 70 per cent tariff to imported new vehicles, charging importers of used cars only 35 per cent. Currently, scores of vehicles are trapped at the land borders as the NCS enforces the ban, sparking off protests by clearing agents who insisted that their vehicles were ordered months before the announcement in December.
In our view, the Federal Government’s new policy only scratches the surface of the problem it intends to address, and is capable of plunging Nigeria right into the misery foisted by the same policy before its reversal by the Goodluck Jonathan administration. As that administration discovered, the policy had caused the country to record huge financial losses and was only benefitting the Republic of Benin. Having failed to implement the 2013 policy whereby 70 per cent tariff would be imposed on all categories of imported vehicles, the government has now forced a return to the era before it, instead of simply buckling up and implementing the policy in the interest of the country. Where those bringing in used vehicles through the land borders know that they will pay 70 per cent tariff and still choose to toe that path, this would not be an issue for the Federal Government to address, because choice is a key essence of the democratic system. We dare say that the 2013 auto policy floated by the Jonathan government was well thought out and should not have been jettisoned by the current administration, particularly as it had not evolved a better alternative.
In any case, if the experiences of yesteryears are any indication, the new policy would only force clearing agents to resort to full-scale smuggling, further stretching the capacity of the NCS which has hitherto failed to solve the smuggling problem. It will also expand the financial frontiers of corrupt Customs officers. The government will thus end up losing the badly needed revenue. What is more, the policy has the potentiality to shoot up the prices of fairly-used vehicles, thereby aborting the dreams of Nigerians who desire to own cars or replace old ones.
More fundamentally, the resurrected policy leaves the fundamental issues surrounding the preference of Nigerians for the tortuous route of buying cars in neighbouring countries and bringing them into Nigeria unaddressed. Till date, the government has failed to publish the duty payable on every model of vehicles, to halt the regime of extortion by Customs personnel. The valuation procedures at the ports are worrisome; the cost of bringing in consignments into the country is massive. Indeed, the ports are sites of an extensive network of criminality where wharf rats hold sway, pilfering vehicle parts. The clearing of consignments is slow and haphazard. Given this situation, why restrict all vehicle imports to the seaports with effect from January 1, 2017 when you have not made the seaports conducive for business? And why give the impression that if a policy appears to have worked for rice, it must similarly work for cars?
There must be something wrong with Nigeria returning to primitive policies when even the neighbouring countries which are smaller in size and endowments are expanding their economy through good policies. Ghana has a policy whereby the older the vehicle, the higher the tariff paid, and this should serve as an eye-opener for Nigeria. Instead of banning vehicles coming in through Nigeria’s land borders, the Federal Government should have asked the fundamental question, namely: why do Nigerians find it easier to go to bring in cars through the land borders instead of the ports?
We call on the Federal Government to reverse its ban of vehicles through the land borders and revert to the 2013 auto policy. This is the way to go.