8th June, 2021
By Daniels Ekugo
For five consecutive years, the Federal Government of Nigeria has lost half of its revenue accruing from duties paid on imported vehicles as 50 per cent of vehicles come in illegally.
These vehicles come through the closed borders and seaports without payment of duties to the government treasury, an investigation by the Nigeria Auto Journalists Association (NAJA) has revealed.
The economic sabotage, which gained traction in the first quarter of 2016, when the land borders were closed by President Mohammadu Buhari regime is perpetrated by either influential people/dealers who hand out signed documents to the Customs or bribe their way to clear the vehicles without due process.
In connivance with unscrupulous government officials, some dealers are treated as sacred cows and they are quick to get away with anything at the ports.
NAJA checks revealed that the illegal business does not stop at seaports alone; similar dealings have been reported in major land borders across the country, including Kpobe (Ogun State), Ijowu (Ogun State), Seme (Lagos State), Idiroko (Ogun State), Shaki (Oyo State), Daura (Katsina State), Baga (Borno State) etc.
It would be recalled that the Nigeria Customs Service (NCS) had September 2019 raided some top car marts in Lagos.
The comptroller general’s Strike Force and officers attached to the Federal Operations Unit (FOU), Zone ‘A’, Ikeja stormed Berger along Apapa-Oshodi Express Road and other premises across the state.
Many of them were closed on the orders of the CG Service, Col. Hameed Ali (rtd), for allegedly retailing smuggled vehicles in the shops.
Major car dealers including Affordable Cars Limited, Carlink Limited, Ineh Mic Autos, Globe, Coscharis, Skymit, Arrowhead Motors, Wonder Wheels, Auto Point, among others were raided. Showrooms in other states, including, Sokoto, Katsina were equally affected.
The second-hand vehicles dealers were not spared as most of their showrooms were equally closed too due to reasons that have to do with documentation.
Commenting, Remi Olaofe, the executive secretary, Nigeria Automotive Manufacturers Association, (NAMA) said “you can’t say there is no smuggling in Nigeria; our borders are porous and we have done everything we needed to do to improve it, by shutting down the borders, but they are still porous.
Olaofe said it is a fallacy to say for every vehicle coming into the country, appropriate duties are being paid.
Stating that NAMA has proffered solution to the menace, Olaofe said that with their portal and that of the National Automotive Design and Development Council (NADDC, it will be 100 per cent impossible for anybody to import a vehicle and not properly register in Nigeria because the portal will indicate that the appropriate amount of money is not paid.
“It is just as simple as that, but for the reason best known to the operators and the players in that market, they have refused to allow that portal to work”, he said.
Advising that vehicles must be registered for them to be driven on the road, Olaofe added that “You can’t be driving a vehicle that is not registered. To know this, they should go to the licensing office because the licensing office can not license a vehicle without first clarifying from the portal and that clears the vehicle. If that is not there, we have what is called the BIN number, will throw up a red flag”.
Explaining further, Olaofe said, “I don’t represent the (FBU) Fully-Built Vehicle, mine advocacy is for us to shut our doors against the FBUs. Assembling of vehicles in Nigeria is what I represent”.
Confirming that the duty waiver for vehicles has been adjusted, but there is no difference in the rate of vehicles, the executive secretary said “We are saying that it is not a duty that is affecting the rate we are paying as transportation fare”.
”But the factors are the cost of fuel, infrastructure, security on the road, wear and tear, replacement of these spare parts and the conditions of the vehicles. They bring a lot of junks into this country”.
“Africa Bilateral Free Trade Agreement has taken off, where is Nigeria in the scheme of things? Assembly plants are now moved to Ghana, what do we stand to benefit from?
”Toyota, Hyundai and co are being assembled in Ghana, are those for Ghana economy? They are for Nigeria economy”, Olaofe added.
Kunle Jaiyesimi, Deputy Managing Director, Massilia Motors, dealers of Mitsubishi brand of vehicles said most car dealers, including Massilia Motors, are still selling their old stock and that his company had stocked up to December for the 2021 business.
According to him, the car market has really shrunk and that dealers have not really made major decisions in 2021 in terms of vehicle imports.
Jaiyesimi said “to the assemblers, they are not happy with the Finance Act; it’s making the locally assembled vehicles uncompetitive compared to the Fully Built Units. For instance, Fuso and Canter (Mitsubishi) that we are assembling, it is cheaper to bring them in as FBU than locally assembling them. And that has affected our production lines.
Jaiyesimi who is also the Chairman, Auto Group of the LCCI proffered solutions, saying that “the only way for us have some gain on the assembly line is for govt to remove the import duty or reduce it. If they cannot remove it, they can bring it down to five per cent”.