The Punch

Monday, March 14, 2011

Policy reversal: Used vehicle importation rises by 30%


The decision of the Federal Government to increase the age of imported used vehicles from 10 years to 15 years has led to a marginal increase in the number of such vehicles brought into the country. However, the government is set to review the policy following criticisms by stakeholders, RASHEED BISIRIYU writes An increase of over 30 per cent may have been recorded in the importation of used cars into Nigeria, about three months after the Federal Government raised the age limit from 10 years to 15 years, investigation has shown.

Used vehicles


But dealers of tokunbo cars, as the vehicles are popularly called, say nothing has changed in terms of sales figure. They claim that the new government policy, announced in November last year, had not translated into higher sales for them.

But a review of the policy may be in the offing, following continued criticism by local auto manufacturers, dealers and other concerned industrialists.

A circular from the Federal Ministry of Finance with reference number; BD.12237/S.403/Vol.1/206 and dated November 19, 2010, which was sent to relevant agencies, including the Nigeria Customs Service, stated that the President had granted an "extension of the age of used motor vehicles to be imported into the country from 10 years to 15 years from the year of manufacture."

This has generated a heated debate from the public, with manufacturers and dealers of new vehicles vehemently condemning the policy as being retrogressive and capable of frustrating current plans to make more Nigerians drive new cars.

The Nigerian Automotive Manufacturers Association, which decried the policy, noted that its negative impact outweighed the short term benefits and, therefore, called for stricter control of the inflow of used vehicles.

The association also said that overused vehicles, which could no longer satisfy the emission standards in their countries of origin, would be imported to Nigeria. This, it stressed, would add to the country's environmental problems and drain its resources.

An investigation conducted by our correspondent in Lagos on Saturday, indicated that a marginal increase had been recorded in the number of used vehicles imported into the country since January, when the 15 year age limit was expected to have taken effect.

The Public Relations Officer, NCS, PTML Command, Lagos, Mr. Chris Ogbonna, put the increase at about 30 per cent.

Although Ogbonna could not give accurate figure of vehicles that came into the country after the announcement because he was not with the record, he said, "Generally, there ought to be an increase in the cars. It may not be an upsurge. For instance, if we were having 100 cars before now, it should be between 120 cars and 130 cars now."

Figures obtained by our correspondent from the Nigerian Ports Authority on the shipping position from January 28 to March 10, 2011, lent credence to the Customs man's position.

For instance, the January 28 shipping position showed that 1,400 vehicles were imported as contained in some of the vessels waiting to berth at the ports. It also gave an average of 2,000 used vehicles on every shipping position list in February.

A similar trend followed in March. For instance, the March 4 list presented 2, 800 used vehicles; March 8, 2,250 vehicles, and March 10, 1,895 vehicles.

The Managing Director, Anafi Investment Nigeria Limited, Alhaji Shuaib Anafi, said it would take about five months to really know the impact of the new policy.

"It usually takes between 45 and 90 days for vehicles ordered from Europe to arrive the country," he said.

He, however, admitted that there had been a marginal increase in the number of used vehicles being imported. The increase, he noted, was for vehicles whose ages ranged from 10 years to 15 years.

But the car dealers were of the view that the increase in the age limit of vehicles being imported had not affected their sales figure in any way. Government, they said, had only "snatched" some of the old vehicles away from the neighbouring countries' ports and unauthorised borders.

The Managing Director, Sharp Cars Limited, a Lagos-based auto dealer, Mr. Ubani Chigozie, said that the ban on the importation of some old vehicles had not prevented over-aged vehicles from coming into the country.

He described the policy as an after-thought and that it had not changed anything. "No one dealer can say it has improved his business. When the ban was in force, the cars were still coming in," he said.

But the Federal Government may soon reverse the policy, according to the Minister of Commerce and Industry, Senator Jubril Martins-Kuye. He gave the hint in an interview with our correspondent in Lagos on Saturday.

Although Martins-Kuye said that the policy was expected to assist people in the middle-class, who could not afford new cars, the government, he said, was worried about the spate of criticisms trailing the policy reversal and the concern expressed by local manufacturers.

He said, "The whole idea is that the Nigerian government wanted the middle class to come back to boost the economy. Government felt that the tokunbo vehicles were more affordable to the middle class.

"But that decision will be revisited as soon as possible. There is a new thinking in government and the issue may be revisited because this is a listening government. All the comments are being harvested and they will be acted upon. I don't know how soon."

The minister, who said that government was seriously thinking about bringing back more motor assembling plants, expressed regret that the project was not one of the things he could point at as an achievement since he returned to the government in the last one year.

He recalled that Nigeria used to have viable assembling plants in the 1970s, which increased from two to six.

"In South Africa, they currently have about 16 assembling plants producing vehicles, some of which come to Nigeria. We are importing about 80,000 Toyota vehicles; the albatross of our industrial development is electricity," he said.