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Nigeria’s auto-policy in tatters as Cars and Motorbike importation hit N1 trillion

Used Cars and Motorcycle importation

Recent data obtained from the National Bureau of Statistics (NBS) show that between the first quarter of 2018 and the second quarter of 2019, Nigeria had spent the total sum of N1.03 trillion to import used vehicles (popularly called Tokunbo) and Motorcycles (Okada) into the country.

According to the various NBS reports gathered, while importation has surged between the periods, used cars and motorcycle importation into Nigeria grew by 325%.

The Trends: According to the Bureau’s report, Nigeria’s import bill has been on the rise and this is largely reducing the country’s net trade balance (the balance of total export minus the import). For instance, in the foreign trade report released for Q2 2019, NBS stated that the performance of Nigeria’s trade was largely as a result of stronger growth in the value of imports far outpacing the value of exports which rose only marginally.

Industry in tatters: Ride and Motorcycles or Bike hailing platforms are one of the two fastest-growing businesses in Nigeria. Globally, the popular ride-hailing platform, Uber, introduced its operation in 2009. Five years later (July 2014), it launched operations in Lagos State, Nigeria to make it the 4th City in Africa.

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

[READ: Toyota snubs Nigeria as it moves to establish assembly plants in Ghana, Ivory Coast 

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

“What is the problem there. It is an insult to say that a senator of the Federal Republic cannot ride a jeep in Nigeria. It is an insult.

“The N5.5bn is from the national Assembly fund and it is budgeted for every Assembly which they will pay back at the end of the tenure. I was a permanent secretary, I know what ministers get, we cannot even compare ourselves with ministers because we are higher than the minister.

 “For you to say that a senator of the Federal Republic cannot drive a jeep today, come on, that is an insult. Go and tell the people that the work that we do, is more than the work of ministers. The weight that is on me today there is no minister of the Federal Republic that has it,” The Senate leader stated.

There is no gainsaying that, the Nigerian economy is largely import-dependent, and for now, even the lawmakers and the government show no signs of contributing to solving import menace. Recently, Nigerians have raised concerns about why political office holders cannot be mandated to use locally assembled vehicles.

One thing is clear, the continued rise in importation of used vehicles will continue to affect innovation in the automobile industry, and this also further leads to more pressure on the country’s foreign reserves which has depleted in recent months.

 

 

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