Two years into the implementation of the Federal Government automotive policy, the volume of imported vehicles coming into Nigeria through the nation’s seaports has dropped by 67 percent.
This is, as Nigerian importers now prefer to bring in the vehicles through the neighbouring Cotonou port, where it is cheaper to import vehicles and bring them into Nigeria through land border.
BusinessDay search shows that before the implementation of the new auto policy, which raised duty paid on imported vehicles from 20 to 70 percent to encourage the upcoming assembling plants in the country, about 30,000 new cars and trucks used to arrive Nigeria every month across all the Roll-on Roll-off (RORO) terminals, but the volume has now dropped to about 10,000 monthly.
Speaking in an interview in Lagos, Asconio Russo, managing director/CEO, Ports and Terminal Multi-Services Limited (PTML), operators of Nigeria’s biggest RoRo terminal, said business was currently low for the whole terminals involved in RoRo operations.
“Our business is down by about 60 percent, which is a significant drop and this has to do with the auto policy, which increased duty on imported cars and buses from 20 to 70 percent since July 2014. As a result, there was huge diversion of traffic to Benin Republic such that Benin Republic that used to be one of the major reason why Nigeria has been losing revenue from imported vehicle, became the most important port for Nigerian vehicles,” he said.
According to Russo, this has also resulted to job and revenue loss for the government, which can be quantified to be over N300 billion annually. “The survey we carried out at the ports four months ago reveals that over N300 billion revenue has been lost by government in terms of duties and levies that would have been collected by the Nigerian Customs Service (NCS) and other agencies of government, but with the current exchange rate, the lost could be up to N400 billion,” he said.
This, Russo pointed out, is a huge loss in terms of revenue to the government as well as loss in cost of living given the fact that Nigerians at the end pay hugely to purchase those vehicles.
“Currently, Nigerians are even forced to buy cheaper vehicles, because they cannot afford to buy vehicles with high level of duty that is why many old vehicles and trucks come to the port these days. But at Grimaldi, we don’t accept salvaged or accidented vehicles.
“All we know is that there are a number of carriers bringing accidented vehicles like 15 years old that is completely damaged. Nigerians buy them, fix such vehicles and then put them on the road. The negative impacts are in terms of pollution, accident and breakdown, among others,” he said.
Jonathan Nicole, president, Shippers’ Association of Lagos State, also said over the weekend that Nigeria was losing about N800 million annually as a result of high import duties on vehicles, such that some of the terminals dedicated to handling of car importation were going under due to low patronage.
He said most Nigerian importers no longer import vehicles into Nigeria but they use the port situated in the neighbouring countries, especially the Cotonou port, to bring in their vehicle imports.