Vehicle smuggling through border stations rises on customs’ laxity, corruption

Eight months into the implementation of the Federal Government ban on importation of vehicles through the land border, the volume of vehicles smuggled into Nigerian markets from Cotonou through Seme, Idiroko and other land borders, has continued to increase.

BusinessDay search revealed that this development was largely due to the laxity and sharp practices by some corrupt officers of the Nigeria Customs Service (NCS) at the border stations, who most times connive with importers to bring in vehicles from the borders.

Consequently, the volume of vehicles imported through the seaports, on the other hand, has remained low as importers prefer to buy their cars from Cotonou because is also cheaper to clear imported vehicles at the border compared to the ports.

Recently, the Benin Republic Ministry of Transport reduced the amount charged on transit vehicles from the Cotonou port. As a result, the cost to clear a car discharged in Cotonou on transit to Nigeria, was slashed from CFA399,920 (N257,000) to CFA290,000 (N186,000) and this took effect from July 1, 2017, geared towards attracting more Nigerians.

The new charge, which applies to a unit of any imported vehicle irrespective of the model or brand, was far cheaper than Nigerian ports that collect high charges of 35 percent import duty and another 35 percent surcharge, amounting to a total of 70 percent of the market price of the vehicles. This discourages importers from using Nigerian ports.

The volume of cars imported through the ports dimed in 2015, when the government commenced implementation of new automotive policy that was designed by the GoodLuck Jonathan Administration to protect licensed assembling plants, resulting to huge diversion of Nigerian cars to other ports and rise in volume of smuggled cars.

For instance, a 2015 Toyota Prado jeep that can be cleared from Nigerian ports with nothing less than N6 million, can be cleared from the border with just N1 million by the same Customs.

Currently, old and dinted vehicles that pay comparatively low duties are being discharged in Lagos while the newer and more expensive second hand cars go to Cotonou to reduce the duty.

A Markudi based car dealer, who buys vehicles from Cotonou regularly, told our correspondent on the basis of anonymity that officially, Customs has stopped allowing vehicles to pass through the border but at the Seme border, corrupt Customs officers collect money from smugglers to issue genuine Customs documents, thereby legalising such import.

“Though, the last time I was at the border, I bought the car my customer requested from a smuggler, who specialises in buying vehicles from Cotonou and passing them through the border with genuine documents. But before then, I have been going to Cotonou since this year that the ban started, to buy vehicle and people once said that Customs has relaxed the ban because as we speak, Customs is no longer strict with the implementation,” the source said.

According to the source, though, “Customs intercept vehicles intermittently, but it was only the vehicles of smugglers, who refuse to play ball as requested by the officer.”

“There has been zero tolerance to vehicle importation through Seme border and we have been carrying out total implementation of the Federal Government’s fiscal policy on automotive imports.  Evidence is on ground at our command to show that vehicles of smugglers, who tried to outsmart Customs, were intercepted and kept in our custody,” said Selechang Taupyen, public relations officer of Seme Customs command, in a telephone interview with BusinessDay.

Taupyen, who countered the report that smuggling of vehicles was on the rise at Seme border, said ‘it was a mere allegation,’ but disclosed that the command recently intercepted vehicles being smuggled through the borders but had clearance documents from port.

“When we have such irregularities, we intercept such vehicles to enable us carry out investigation as to why vehicle with such papers was coming from the other end,” he added.

Also, the volume of cars imported through the Autonomous Port of Cotonou on transit to Nigeria, has also recorded significant growth since March 2017.

Statistics from the Autonomous Port of Cotonou shows that the volume of imported vehicles from Cotonou reached over 10,000 units in July while the volume of cars imported through Nigeria seaport reached an all-time low of just 3,500 units in January 2017.

“From all indications, this figure is going to grow in the next month, as the naira has strengthened against the CFA, more and more traders will be patronising the port of Cotonou,” said Elisee Dieudonne, a senior staff of a shipping line calling at Cotonou port .

“We expect that this reduction in charges in Cotonou port will divert even more vehicles to Benin Republic, while the volumes in Lagos will remain stagnant,” Dieudonne said.

Importers of Nigerian-bound vehicles and other cargoes prefer landing them at Cotonou and other neighbouring ports before smuggling them into Nigeria to avoid high Customs tariff.

Vicky Haastrup, chairman, Seaport Terminal Operators Association of Nigeria (STAON), applauded the government for the new policy of ban on vehicle importation through the borders, but solicited for the government to consolidate the gains of such policy by reducing the 70 percent tariff on imported cars.

“Since the high tariff was introduced, importers have resorted to landing their vehicles at the ports of neighbouring countries and smuggling them into Nigeria without paying appropriate duties to government. This amounted to huge revenue loss to Customs.

“The policy also led to loss of more than 5,000 direct and indirect jobs at the affected ports.”

She said the Federal Government loses about N200 billion annually to diversion of automobile imports to the Port of Cotonou in Republic of Benin. The amount represents the value of tariff that should have accrued into government coffers through the Customs if the vehicles were imported through Nigerian ports, as Nigerians are yet to see the impact of the existing auto assembling plants.

 

 

Uzoamaka Anagor-Ewuzie