On Monday, December 5, 2016, the Federal Government of Nigeria issued a new prohibition order stating that as from January 2017, there will be no more importation of cars and vehicles through the land borders.
The Nigeria Customs Service said the ban is sequel to a presidential directive restricting all vehicles imports to Nigeria sea ports with effect from January 1, 2017. As such, both new and used cars at all land borders are expected to be cleared by the end of the year–December 31, 2016.
Something similar was implemented in 2013 under the administration of President Goodluck Jonathan, with many citizens and even policy makers decrying the decision and saying that the policy would not work. This was under the premise of an Automotive Industry Development Plan for the development of the nation’s automotive industry as expressed by the then Minister of Information, Labaran Maku, as the plan was expected to attract investment to the sector and transform the automotive industry.
Some were of the opinion that it would end up improving the economy of neighbouring Benin Republic and increase incidences of grafting through the customs service. However, the current administration of President Muhammadu Buhari intends to use the ban to increase revenue via sea ports and control incidences of smuggling.
It is not news that Nigeria’s land borders are porous and have seriously undermined economic policies despite the presence of several agencies from respective countries at such borders. For example, at the Seme-Badagry border, Nigerian and Benin Republic security agencies exist, yet the illegal movement of various products in and out of the country has not been effectively controlled.
This is the situation that exists at almost all the land ports in Nigeria. In addition, at these same ports and surrounding are smuggling routes that have been used by traffickers for getting in contrabands into and out of the country.
The Federal Government had disclosed earlier during the year that it would introduce the ban at the land borders and enforce the presentation of roadworthy certificates on vehicles from their originating countries before allowing them into Nigeria as a means to control the influx of said used cars.
The Operations Manager, Ports and Terminal Multiservices, Jack Angrish, said, “The spirit behind the ban is to bolster domestic manufacturing and vehicle assembly that has been at their ebb over the years”, noting that vehicle imports had reduced from 30,000 to 6,000 in the last eight months with the attendant problem of loss of jobs by terminal officials.
The auto policy included the imposition of 70 percent tariff on imported cars, both old and new ones. However, while importers of new cars are currently paid the stated tariff as import duty, cars importers pay 35 percent.
It is reported that the President of the Association of Nigerian Licensed Customs Agents (ANLCA) Prince Olayiwola Shittu has said that the government took the step because the country may be losing an additional 800 million naira yearly as a result of high import duties on vehicles, as most of the terminals dedicated to handling car importation are almost idle.
In a related development, the Seaport Terminal Operators of Nigeria has commended President Muhammadu Buhari for banning the importation of vehicles into the country through the land borders, stating that if well implemented by the Nigeria Customs Service, smuggling will be reduced and the operations of Roll-On-Roll-Off (RORO) terminals in the country would be revived.
However for this policy to be better implemented, one would expect that issues affecting the effective use of Nigeria’s sea ports are addressed such as service delivery, issues of graft, access roads, high port charges as well as returning the import duties on vehicles to 20 percent from 70 percent as imposed by the former administration on before or by January 2017.