Nigeria spent a total of N601.51 billion on the importation of motor vehicles in the first half of the year. This is contained in the recently released foreign trade report published by the National Bureau of Statistics.
This represents a 15% increase compared to N523.57 billion recorded in the corresponding period of 2020, despite the reduced import duties on vehicles.
Vehicle imports accounted for 4.4% of total imports of N13.8 trillion recorded in the period under review. Meanwhile, a total of N1.09 trillion was spent on vehicle imports in the previous year.
Going further, in the second quarter of 2021, imports of passenger cars grew by 14.03% to N311.63 billion compared to the corresponding quarter of 2020 where imports for the same item stood at N273.28 billion.
Over the past three years, Nigeria has steadily increased its import of vehicles by 195% from N371.98 billion in 2018 to N1.09 trillion in 2020. This could be as a result of an increase in cab-hailing services and technologies, like Bolt, Taxify and Uber.
By extension, as the imports of motor vehicles increased in Q2 2021, it made up 39% of the total transport equipment and parts imported during the same period, which is N798.51 billion.
It is also worth noting that Nigeria imported used vehicles, otherwise known as “Tokunbo” worth N172.1 billion in the second quarter of the year, being the third highest imported item by value.
What you should know
- Recall that, in January 2021, the government revised the import duty tariff for transport vehicles from 35% to 10% as part of the measures to ease the cost of transportation across the country and reduce the impact of the coronavirus pandemic in 2020.
- However, in June 2021, terminal operators announced a 50% increase in terminal handling charges, which has discouraged importers of vehicles, meaning that importers of cars now have to pay double.
- In other words, the import duty tariff slash by the Federal Government has been greatly subdued by terminal charges and hence, cannot have any positive effect on the operating environment or encourage vehicle imports.