High import tariff stifles vehicle business in Nigerian ports as volume declines

The high tariff placed on imported used vehicles since the commencement of the federal government’s automotive policy, has reduced the number of cars that are coming into the country through the seaport, BusinessDay has learnt.

By estimation, Nigerian seaport in the last one year, has loss over 50 percent of its second-hand vehicles to ports in the neighbouring countries of Cotonu and Togo where it is cheaper to import and clear vehicles before bringing into Nigeria.

“Before the new auto policy came into existence, 80 percent of the imported tokunbu vehicles were coming into Nigeria through the seaport while 20 percent come via Cotonu land border. At that time, all the second hand trucks were also coming through the port but after the policy started, over half of the second hand vehicles go to Cotonu,” said Val Osifo, chairman, Nigerian Shipping Association (NSA).

According to him, Nigerian port has loss over 50 percent of the second vehicles, and these vehicles are needed because the number of assembled cars will not be enough to cater for the needs of the nation’s population and most Nigerians cannot afford new cars.

Citing example, Osifo said that Grimaldi, a leading roll-in and roll-off terminal, located in the Tin-Can Island port in Lagos used to have two ship loads of vehicles calling the terminal daily, but it now gets one ship in four days due to declined volume of imported vehicles.

Osifo, who noted that inconsistence in government policies are affecting the generality of the business environment, said that there is need for government policies to be predictable to favour medium and long-term investment.

Tony Anakebe, a maritime analyst, who confirmed that high tariff on imported used cars, has succeeded in stifling vehicle business in Nigerian seaport, stated that importers are expected to pay 35 or 70 percent of the car’s market value as duty to the Nigeria Customs Service (NCS) depending on the year the car was manufactured.

“Importers of vehicles manufactured between 2009 and 2015 pay as high as 70 percent while those that bring in vehicles of 2008 model down, pay 35 percent as duty, and this has help in reducing volume in the port,” he explained.