Encomium
THE new Federal Government policy on imported vehicles has continued to attract public outcry. The new policy implemented on Tuesday, July 1, 2014, has been described by Nigerians as anti-people and meant to make vehicle purchase out of the reach of the common man.
The new auto policy requires vehicle importers to pay 70 per cent duty on imported cars.
According to the Ministry of Industry, Trade and Investment, Olusegun Aganga, “The policy is necessary to check the activities of importers putting a strain on Nigeria’s foreign reserves.”
He disclosed while defending the policy that Nigerians spend about $3.4 billion (N544 billion) on importation of used cars and spare parts. He said the few local vehicle manufacturing plants in the country would get extra concessions of being allowed to import vehicles at 35 per cent. The Minister insisted the new regime would only apply to those who import used vehicles into the country, while those who manufacture locally would enjoy the old tariff.
“It is only for those who are putting a strain on our foreign reserves, who have no intention of creating jobs in the country, who want to continue to remain traders that the 70 per cent duty applies to.
“If we don’t implement this policy, the pressure on the economy of this country will be unbearable because we rely heavily on the importation of vehicles and this is not what we want to use our foreign exchange for.”
To cushion the effect of the new policy on prices of cars in Nigeria, the Minister disclosed that local manufacturing and assembly companies and some major car distributors and importers had undertaken not to increase prices.
Car dealers in the Lagos metropolis are not happy with the new policy just as the clearing agents and freight forwarders operating at the nation’s ports feared they could be out of job with this new policy.
The Association of Nigeria Licensed Customs Clearing Agents (ANLCA) and the National Association of Government Approved Freight Forwarders (NAGAFF) have come out to protest the new policy urging the Federal Government to suspend it for now. The two bodies placed an advertorial on Monday, July 7, 2014, to condemn the policy, maintaining it can’t work in this present economic situation in Nigeria.
The advertorial highlighted the pain the new policy would inflict on clearing agents and freight forwarders. They reckoned increasing the cost of imported vehicles astronomically before making local alternatives available amount to paying more for the same product. An imported brand new car that sells for N1.5 million will rise to N2.55 million with the policy and used car that cost N700,000 would automatically become N1.19 million with the new policy and therefore unaffordable to many more Nigerians. The association also raised an issue that the policy will no doubt encourage smuggling while neighbouring countries will benefit more. They also feared there would be mass job loss because if clearing agents and freight forwarders can’t work anymore, they join the army of unemployed Nigerians.
The beneficiaries of this policy are big time auto dealers in Nigeria like Coscharis, Innoson, Elizade and others. Already Innoson Motors have completed its motor plant in Enugu and have started production. Others are still working on their own plants.
– FOLUSO SAMUEL
