The umbrella body of auto makers in the country – the Nigeria Automotive Manufacturers Association (NAMA) – has described Federal Government’s ban on the importation of vehicles through the land borders as cheering news for the economy, insisting that the country loses a lot of revenue through such routes.
NAMA said in a statement that pronouncement last December followed series of discussions between government and stakeholders on the harm being inflicted on the economy via vehicle importation through the land borders,
Signed by the Executive Director, Remi Olaofe, the association argued that importation of vehicles through the land borders constitutes a major revenue leakage to government, because import duties that should have been paid in Nigeria hitherto ended up in the coffers of neighbouring countries.
Olaofe remarked: “Going by National Automotive Design and Development Council’s (NADDC) report that the level of automotive imports to Nigeria in 2014 was over USD5billion, one can safely project the imports through our land borders which are not accounted for by way of duty payment, would be in the excess of USD2billion. This figure translates to over USD700 million loss in revenue to the country.
“With the drive towards the full implementation of the National Auto Policy, the place of accurate data cannot be overemphasized. Investors need to be well aware of the size of the market in making investment decisions. The level of damage to our economy both from Fiscal and Monetary policies perspective is overwhelming when we come to realisation that the data we plan with is greatly distorted by the unreported imports going through our land borders. This explains why investors, foreign and local, are constantly at a loss when they compare observed market potential with what is officially reported”.
The association noted that while it was not surprising to see the pressure being mounted on the upper and lower chambers of the National Assembly by some parties to have the ban reversed, it found it worrisome that the legislators would succumb so easily to the moves.
NAMA also allayed the fears being expressed in some quarters about job loss as a result of this policy initiative, saying: “The Federal Government, through the closure of our land borders to vehicle importation, has not placed any ban on the importation of vehicles. Its intervention is to avert the painful activities of smugglers of vehicles through our land borders and loss of revenues to our neighbouring countries and legitimate stakeholders in the auto industry.
“We also consider it paramount to enlighten everyone that inbuilt in the new auto policy are distributors’ schemes, Auto finance schemes and an organised second-hand market for the locally used vehicles. We envisage a creation of over 4,000 direct jobs and much higher figure for indirect jobs coming with the policy.
“One is at a loss on why Nigerians would prefer to bring in their vehicles through the neighbouring countries, knowing fully well that these vehicles are mostly from America and Europe by sea and why are we unwilling to pay the duties and associated costs to Nigeria but would rather pay to our neighbours?
“We are aware that the National Automotive Design and Development Council (NADDC) and the Nigerian Customs Service are working on a joint scheme to further curtail avoidance of duty payments, especially by smugglers.