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Nigerians spent N148 billion in 3 months to import used cars

The latest import data released by the @nigerianstat shows that Nigeria spent a whopping sum of N148 billion to import used Vehicles (popularly known as Tokunbo) in the first quarter of 2019. Analysis shows that in one year, Nigeria spent the sum of N417.66 billion to import used vehicles

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Nigeria spent N148 billion to import used Cars in 3 months

The latest import data released by the National Bureau of Statistics (NBS) shows that Nigeria spent a whopping sum of N148 billion to import used Vehicles (popularly known as Tokunbo) in the first quarter of 2019.

According to the NBS report, out of the total N3.58 trillion worth of goods imported in the first quarter of the year, used Vehicles amounted to N148 billion. This represents about 4.63% of Nigeria’s total import in three months.

Nigeria’s top 15 imports

Nigeria’s top 15 imports constitute about 38% of total imported goods in the first quarter of 2019. Basically, the top 15 imported goods were estimated to be valued at N1.35 trillion.

Top on the list is laboratory, hygienic or pharmaceutical glassware product, which was estimated at N517 billion for the quarter. Similarly, the second item on the top 15 list of imported goods is the Premium Motor Spirit (Petrol), gulping the sum of N190 billion. Meanwhile, used vehicles are the third most imported goods into Nigeria.

  • 1st  – Laboratory glassware         – N517 billion
  • 2nd – Motor spirit, ordinary         – N190.7 billion
  • 3rd – Used Vehicles                     – N117.4 billion
  • 4th – Imported motorcycles         – N95.3 billion
  • 5th – Gas Oil                              – N62.2 billion
  • 6th – Machines                            –  N56.7 billion
  • 7th – Durum wheat (Not in seeds) – N43.8 billion
  • 8th –  Durum wheat, Seed            – N43.8 billion
  • 9th – Sugar Cane                         – N34.5 billion
  • 10th – Lubricating oils to be mixed – N41.6 billion
  • 11th – Used Vehicles                     – N31.4 billion
  • 12th – Vehicles (petrol fuel engine) – N30.8 billion
  • 13th – Other machine-tools           – N29.3 billion
  • 14th – Other Herbicides                – N24.8 billion
  • 15th – preparations for infant use  – N23.3 billion

Billions spent on Used cars 

An earlier analysis of data obtained from the U.S Department of Commerce shows that Nigeria imported used vehicles worth $526 million (N161 billion) from the U.S in 2018, as against $284 million (N87 billion) in 2017. This implies that a large chunk of Nigeria’s foreign exchange is spent on imported vehicles.

Since 2015, the total amount of money spent on the importation of vehicles from the U.S only rose significantly. Further analysis of the NBS data shows that between March (2018 and 2019), Nigeria spent the sum of N417.66 billion to import used vehicles.

Imported Cars in Nigeria in one year, estimated at N417 billion

Is Nigeria a dumping ground?

Importation appears to be one of the major banes of the Nigerian economy. This explains why car importation has surged over the years. The figure provided by the bureau, to say the least, omitted smuggled cars. Smuggled items and the importation of sub-standard goods have led to the death of several companies.

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Recently, the CBN announced that it has concluded plans to close the bank accounts of smugglers. While this is a step in the right direction, it may not curb the importation of used cars.

Nigeria’s automobile policy: One would wonder why Nigeria’s automobile industry has been at a standstill for many years.

In 2014 the Federal Government increased import tariffs and duties on imported new and used vehicles to as high as 70 percent, while reducing tariffs on semi-knocked down and complete knocked down vehicles and assembly machinery to a range of 0 to 10 percent.

Five years later, the rigmarole still lingers as used car importation gulps billions of naira. According to the Managing Director of VON Automobile Nigeria Limited and Chairman of the Nigeria Automobile Manufacturers Association, Tokunbo Aromolaran, revealed;

“Nigeria had about five or six booming auto industries in the 70s; they all died because they couldn’t compete against the imports from China and Southeast Asia. The industry was redefined by the Auto Policy as most of you know. We have achieved partial success as envisaged when that policy was put together. Partial, in the sense that not all the requirements of the policy have been or is being implemented as it should.

Stanbic 728 x 90

“Today, South Africa has a full auto industry. They can produce everything from ink to the final car, including engine blocks. BMW is there, Mercedes is there, Toyota is there, Volkswagen is there. South African blacks like you and I are on the floors of the factories, producing those vehicles. Nothing says that Nigerians could not do the same.”

How this affects the Nigerian economy

Increased importation of used vehicles would affect innovation and production of vehicles in the country. As a result, the Federal Government’s auto-policy needs to address this.

  • Industry sources have revealed that the Nigerian customs’ revenue is going down due to fewer vehicles coming through the ports, hence, FG loses billions of naira.
  • Demand for foreign exchange to pay for the imported vehicles may also cause undue pressure on Nigeria’s fragile exchange rate system.
  • Lastly, rising importation of used cars is a quick way to discourage investors in the automobile industry, and further dampens hope of revitalising the sector.

 

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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    Business

    Twitter to establish its first African presence in Ghana

    Twitter has announced Ghana as headquarter of its operations in Africa.

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    Square buys $50 million worth of Bitcoins, Twitter warns political figures to abstain from fake, misleading statements, Has Twitter's Jack Dorsey changed the popular narrative attached to Nigerians?, Twitter forecasts future drop in revenue after milestone record in 2019 Q4 , Twitter founder, Jack Dorsey invest N2.3 million in Nigerian startup, DevCareer , Some Verified accounts may not be able to tweet, as Twitter freezes password reset to address cyberattack, Jack Dorsey Sells First-ever Tweet for $2.9 million dollars as an NFT

    Jack Dorsey, CEO of Twitter Inc has announced today in a tweet that the company is establishing a presence in Africa.

    “Twitter is now present on the continent. Thank you, Ghana and Nana Akufo-Addo,” Dorsey tweeted.

    As part of its mission to serve the public conversation, Twitter is making it easier for everyone to join in and provide more relevant experiences for people across the world.

    Why Ghana as a choice…

    Twitter stated that it chose to expand to Ghana first because the country is an advocate of free speech, online freedom, and the Open Internet.

    In a blog post the company said, “In line with our growth strategy, we’re excited to announce that we are now actively building a team in Ghana. To truly serve the public conversation, we must be more immersed in the rich and vibrant communities that drive the conversations taking place every day across the African continent.”

    “Furthermore, Ghana’s recent appointment to host The Secretariat of the African Continental Free Trade Area aligns with our overarching goal to establish a presence in the region that will support our efforts to improve and tailor our service across Africa.

    “Whenever we enter new markets, we work hard to ensure that we are not just investing in the talent that we hire, but also investing in local communities and the social fabric that supports them. We have already laid foundations through partnerships with Amref Health Africa in Kenya, Afrochella in Ghana, Mentally Aware Nigeria Initiative (MANI) in Nigeria, and The HackLab Foundation in Ghana. As part of our long-term commitment to the region, we’ll continue to explore compelling ways we can use the positive power of Twitter to strengthen our communities through employee engagement, platform activation, and corporate giving,” Twitter stated.

    The company is also looking to hire specialists to join several teams to operate in product, design, engineering, marketing and communications.

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    Reacting to Dorsey’s announcement, Ghanaian President, Nana Akufo-Addo, in a tweet said that the government and people of Ghana welcome welcomed the micro-blogging site.

    “The choice of Ghana as HQ for Twitter’s Africa operations is excellent news. Government and Ghanaians welcome very much this announcement and the confidence reposed in our country,” President Akufo-Addo tweeted.

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    Business

    Youths need critical skills to strengthen Nigerian economy – Bankers Committee’s FITC

    Nigerian youths need to embrace adequate skills and create a pool of well-engaged workforce to directly strengthen the nation’s economy.

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    Financial Institutions Training Centre (FITC)

    Bankers Committee’s FITC has called on Nigerian youths to embrace adequate skills and create a pool of well-engaged workforce to directly strengthen the nation’s economy.

    This was disclosed by the Managing Director, FITC, Chizor Malize, during the launch of its Future of Work Academy for Youths on Monday.

    According to her, the initiative is to continuously bridge the knowledge gap in the country and Africa at large, as it is expected to equip the youths for the peculiar needs of the Future of Work.

    It also seeks to solve the prevalent issue of producing university graduates with degrees and skills that have limited practical use in the current global job market, as well as the requirements for the Future of Work.

    She said, “The world of work is changing rapidly, and competition for the right talent is fierce. Graduate talents have for decades been primarily identified and employed based on academic excellence, however, in the emerging world of work, creativity, innovation, and work-ready skills have become the non-negotiable indicators for competitive advantage, and to evaluate capabilities.

    “It is therefore important for youths to build critical skills, that will equip them for the requirements of the Future of Work in the ever-evolving business landscape. The value FITC FOWA is bringing to corporations at this time cannot be overemphasized. By equipping youths and creating a pool of well-engaged workforce for organizations, FITC FOWA will be directly strengthening the economy and the society in general.”

    Malize added that the initiative offers essential courses in Data Science, Data Analytics, Coding, Digital Marketing, Graphics Designs, MS Excel & Analytics, Digital Marketing, Use of PowerPoint, and other key areas that have been strategically packaged to educate, enlighten, and upskill undergraduates and graduates with the vital skills for the Future of Work.

    What you should know

    Owned by the Bankers Committee (CBN, NDIC and all Nigerian deposit money banks), FITC was established in 1981 as a non-profit organisation limited by guarantee to provide capacity building and serve as a knowledge hub for the Nigerian Financial Services Sector.

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