Acting National President of the Association of Nigerian Licensed Customs Agents (ANCLA), Dr Kayode Farinto, has warned of a potential 50% drop in vehicle imports by December 2023.
He identified high government duties and levies, combined with fluctuating exchange rates, as the key challenges deterring vehicle importation.
Factors Contributing to Import Decline
In a conversation with Nairametrics, Dr Farinto stressed that the removal of fuel subsidies and the resulting decrease in vehicular traffic on Nigerian roads are not the primary reasons behind the import decline.
Instead, the rise in duties and levies on imported vehicles, and unmet government assurances to mitigate these policies, are causing disruptions in the sector.
He further noted that the immediate effects of this drop might not be evident to the public due to a large number of already imported vehicles still awaiting sale.
Impact on the Auto Sector and Potential Price Effects
However, he predicted that the decline in imports could lead to increased vehicle prices, as demand remains high while the supply diminishes.
Dr Farinto’s remarks come amidst growing speculations on reduced traffic on Nigerian roads. He emphasized the need for the Federal Government to reevaluate its vehicle importation policies to prevent further adverse impacts.
Industry insiders and stakeholders have confirmed that heightened duties, levies, and escalating foreign exchange costs are significantly impacting vehicle imports in Nigeria.
Recent data reveals a 35% decline in imports, partly attributed to increased fuel prices and import duties. Many potential car buyers are becoming more cautious as costs surge.
Stakeholder Perspectives and Calls for Policy Adjustments
Francis Atama, a seasoned car importer, emphasized the detrimental effects of multiple taxes on the auto sector. He highlighted the reduced demand in the spare parts market at the Lagos Trade Fair, which has caused late opening hours for dealers.
Dr Kayode Farinto, ANCLA’s Acting National President, remains hopeful that ongoing dialogues with the government will result in policy adjustments, mitigating the impact of these duties and levies.
While recognizing the removal of fuel subsidies as a factor in the import decline, he emphasized its relatively minor impact compared to levies, duties, and foreign exchange costs.
Car owner Joshua Akume gave a personal perspective, stating that clearance costs for his Mercedes car from the port have surged from N1.9 million to over N3 million. Akume attributes this increase to higher foreign exchange costs, emphasizing that the situation has worsened under the current administration.
Another industry insider noted that the continuous rise in car ownership costs might compel dealers to expend their profits before car sales, thereby challenging reinvestment opportunities.
The broader implications for the auto sector remain a concern, with stakeholders eagerly watching for government and industry collaboration to rejuvenate vehicle imports and the associated markets.
May be you should look into this. I paid 5.6 million Naira for import duties for 2016 Infiniti QX60 about 2 week ago. They said if I don’t pay, they will seize the vehicle.
Why re they making it seem like importation of cars is.national necessity. And where is this huge demand coming from when Nigerians are struggling with higher prices of everything due to devaluation. People are even driving less and keeping cars longer and maintaining what they have, rather than opting ro buy new one.
We have to buy locally produced cars then. INNOSON
Please Nigeria’s let patronize Nigeria made good than imported goods
Let promote our local made good.
For economy enbettement
of our future generations.