President Muhammadu Buhari’s tariff on imported cars has led to a smuggling boon that is benefiting neighbouring countries. And NPA boss Hadiza Bala Usman doesnt appear a fan of the policy.
In 2015, the Buhari administration imposed a 70 percent tariff on imported vehicles.
The move was geared toward stimulating local production in line with the local content policy of the federal government.
However, Reuters reports that the policy has successfully reduced the number of vehicles brought into the country this year by a quarter, fuelling smuggling from neighbouring Benin.
Reuters cited data from the Nigeria Ports Authority (NPA).
According to the NPA, car imports in Nigeria fell to 70,453 units in the first 10 months of 2017--a 26.8 percent reduction on the same period in 2016.
NPA MD, Usman said; “we appreciate the need for the government to have assembly and manufacturing in Nigeria but we are concerned that the capacity of the Nigerian market is beyond what is said to be assembled in Nigeria.
“We have seen a lot of cars being smuggled through neighbouring countries - mainly from Benin.”
Most of the cars imported into Nigeria are knocked down or second hand--referred to as ‘Tokunbo’ in local parlance--no thanks to the low purchasing power of the citizenry.
Nigeria’s borders are famously porous and allegedly manned by corrupt immigration and Customs officials who often demand kickbacks or bribes.
Neighbouring Benin has maintained low import tariffs when juxtaposed with Nigeria.
Vehicle imports fell to 96,222 units last year from 131,994 in 2015, according to NPA figures.
Usman said the ports authority expected a further drop in 2018 to 67,400 units, Reuters reports.
From factory to church
Nigeria has been battling a port congestion problem since forever and only a few auto companies have been able to set up assembly plants in Africa’s largest economy.
Nigeria once had car manufacturing and assembly plants during the oil boom of the ‘70s and ‘80s, but those have been abandoned; with factory floors now serving as worship centers.