Auto policy: Stakeholders want plants to start production of vehicles before implementation

Maritime industry stakeholders, who took turn to review the impact of the National Automotive Policy on the nation’s economy especially the port industry, have observed that government needs to ensure that auto assembly plants start producing locally assembled vehicles before commencing the implementation of the policy.

The policy, which was introduced in November 2013 by President Goodluck Jonathan’s administration, directed Nigerian-based car importers who used to pay 20 percent import duty on both imported used and brand new vehicles to pay 35 percent duty on imported used cars and 70 percent on imported brand new vehicles.

The implementation of the policy on imported brand new vehicles took effect from July 1, 2014 while that of imported used vehicles was scheduled to commence later in the year. This means that importers of used vehicles are now expected to pay more as import duty owing to the 35 percent levy and 35 percent duty, amounting to 70 percent import duty to be paid to Customs.

However, the policy according to the Federal Government was geared towards discouraging the importation of vehicles so as to grow local production of vehicles in Nigeria.

Industry stakeholders, who bared their minds at a recent ‘Town Hall Meeting on the National Automotive Policy’ organised by Ships & Ports Communication in Apapa, Lagos, also accused some auto assembly plants of hiding under the policy to import fully-built vehicles under the guise of semi-knocked down (SKD) units with the intention of short-changing government through avoidance of import duty payment.

Confirming this, Dikko Abdulahi, the Comptroller General of Customs, said Customs officers have in the past recorded instances where importers removed the tyres of the fully built vehicles and claimed that the vehicles are SKD.

“If such people succeed without being caught, they would pay less duty to government but Customs won’t allow that to happen,” said Dikko, who was represented by Banke Adeyemo the Assistant Comptroller General, Tariff & Trade of Customs.

Also speaking, Aminu Jalal, director general of the National Automotive Council (NAC), said Nigeria spent about $7.5billon on importation of imported new and used vehicles including spare parts into the country in 2013 alone.

Nigeria, he said, has a growing middle class of 40 million people with a potential vehicle market of 1 million units annually. The NAC DG, who was represented by the agency’s director of Industrial Infrastructure, Kolapo Odetoro however said the country needs to check its huge spending on foreign exchange, which is used to import vehicles into the country annually.

Listing the benefits of the policy, he said: “The local manufacturers of vehicles will therefore not only create wealth but generate a large number of Small and Medium Enterprises. It would create employment, boost and grow local engineering capacity through spill-over effects and develop our local raw materials.”

According to him, NAC is already working with the Federal Road Safety Corps (FRSC) and the Nigeria Customs Service on this issue to ensure that measures are put in place to control vehicles smuggling. “This would be best achieved through the control of vehicle registration system.”

Fred Akokhia, deputy president, National Association of Government Approved Freight Forwarders (NAGAFF), who described the policy as a catalyst for industrialisation in the country, advised the government not to rush into the implementation.

“Government should not rush into the implementation of the policy rather they should check for what led to the mistakes of the past in order not to repeat it. We should do it in a way that when we come out of it, it would be a near perfect policy,” Akokhia said.

Kayode Farinto, a renowned licensed customs agent described the auto policy as “dead on arrival”. According to him, NAC has failed to use the money generated under the 2percent NAC levy to develop the nation’s automobile industry.

“NAC should empower various higher institutions to research and develop new technologies for development of Nigerian automobile industry. The government must also ensure that there is stable electricity because without stable electricity, we cannot get the policy right,” he said.

UZOAMAKA ANAGOR