Is FG right to ban vehicle importation through land border?

This is what the automobile players in this country have been asking for. The rate at which vehicles are coming in almost freely has been terrible for business. The automobile industry has suffered so terribly because of that. So, the action of the government as far as I am concerned is a welcome development. Now, you bring in cars through the seaports where everybody can see them. It is not that some people will get their cars into Nigeria through the ports of another country or smuggle them through porous borders while people who are doing genuine business are losing. Even the customs at the ports are not making money. The income that they should generate is going to another country. The government has been earning paltry income from the import of vehicles.

Secondly, companies that have invested heavily in assembling vehicles will reap from it. One of the things killing that latent industry is the importation of vehicles via land borders. So, it is cheaper to import cars by land than to import parts to be put together in the assembly plant. It is not business as usual again for fake importers.

I also want to state that Nigerians should be mindful of the fact that for each car – which comes to the country by land – the money they pay is going to another country. They are helping to sustain the economy of another country. With the ban, the assembly plants will be more active. Importers, who should help with importing parts to be knocked together in the assembly plant, will be more active. If there is no patronage for the local assembly plants and people are opting to buy cars that are coming in through the land borders, the assembly plants will be redundant and they are going to sack people. So, the government’s action is in the right direction. •Dr. Oscar Odibo (An automobile communication specialist)

The implication of the Federal Government banning the importation of vehicles through land borders is that vehicles that are already expensive due to the foreign exchange crisis will become more expensive whether they are used or new vehicles. Cars are durable goods. During recession, the first signal is that demand for durable goods normally falls. So, it is a challenge.

Today, banks in Nigeria do not give car loan, which makes it difficult for the middle class to acquire cars. Wages are falling and inflation is up. People are losing their jobs and those who have jobs are cutting costs. It is also a big shock to neighbouring countries, especially the Republic of Benin that has become a hub for car export into Nigeria. So, it is a serious challenge for marketers and agencies in that country.

It is a call for the Nigerian port system to be cleaned up. It calls for customs to wake up and rise to their duty and the land borders that have been shut down should remain so. There should be monitoring by not just customs but other agencies such as the Nigerian Immigration Service and the National Drug Law Enforcement Agency. Everybody must step up their games so that we don’t create new incentives and market for corruption on those land borders.

However, the ban is supposed to be a positive implication especially for car manufacturers, regardless of whether the cars are completely knocked-down or semi knocked-down. • Dr. Vincent Nwani (Director, Research and Advocacy, Lagos Chamber of Commerce and Industry)

The move, if well implemented by the Nigeria Customs Service, will reduce the smuggling of vehicles into Nigeria and revive the operations of the Roll-On-Roll-Off terminals in the country. RORO terminals are specialised port terminals that handle all types of vehicles.

 We are confident of the ability of President Muhammadu Buhari to turn the economy around. The earlier ban on the importation of rice and now of vehicles, through the land borders, are a welcome development.

We are happy that the President has listened to our appeal to reverse the incongruous policies inherited by his government from the former administration, which have deprived Nigerian ports of cargoes to the advantage of the ports of neighbouring countries.

Since the high tariff was introduced, importers have resorted to landing their vehicles at the ports of neighbouring countries and smuggling them into Nigeria without paying the appropriate duties to government. This amounted to huge revenue loss to customs. The policy also led to the loss of more than 5,000 direct and indirect jobs at the affected ports.

In addition to this ban on importing vehicles through the land borders, we appeal to the President to return the import duties on vehicles to 20 per cent from the prohibitive 70 per cent tariff imposed by the former administration. The reversal to the old tariff will serve as an incentive for Nigerians to import legitimately through the seaports and make appropriate payments to government.

 This will boost revenue collection by the Nigeria Customs Service. It will also lead to the return of lost jobs at the affected ports. We also appeal to customs officers at the border posts to support the Federal Government and the NCS leadership by ensuring that no smuggled vehicle finds its way into the country through the land borders from January 1, 2017 when the new policy is expected to come into effect. •Vicky Haastrup (Chairman, Seaport Terminal Operators Association of Nigeria)

The Federal Government is supposed to give reasons for the ban. That is a very bad administrative procedure. Secondly, I think the ban is against West African trade within the ECOWAS. Thirdly, I don’t think it will add value – whether it is being done because of auto policy or smuggling. If it is for smuggling, the borders should be strengthened so that only vehicles that pay duties can come into Nigeria. If it is because of the auto policy, the policy does not envisage total banning of importation of vehicles through land borders.

 I am struggling to see the justification. That is why I said the government should give reasons for the ban. You don’t just give such a measure without giving a reason. The minister of finance should come out with the reasons. •Dr. Ikenna Nwosu (Council member, LCCI)

If the reason for the ban on the importation of vehicles through land borders is to check the influx of used vehicles into the country, I think this can also be achieved by putting in place appropriate measures at the land borders without necessarily resorting to an outright ban.

This policy will lead to more ports congestion, increased smuggling activities and also reduce the number of imported vehicles. Given the role of used cars in moderating transport costs in Nigeria, the ban will increase the prices of used cars and raise transport costs in an economy already battling with inflationary pressure occasioned in part by high transport costs. •Uche Uwaleke (Head, Banking and Finance Department, Nasarawa State University) 

Over the years, car importation through our land borders became more cost-effective due to the inefficiency and corruption that have been endemic in our seaports. Nigeria was denied import duties on most of those goods that came in via the land borders en route from mostly the port of Cotonou in Benin Republic

Besides, land policing is almost impossible due to so many porous borders, thereby leaving illegal importers and customs officers to have their way.

Have we dealt with the underlying challenges that made importation via land borders rather than through seaports more cost effective? It is a good move to the extent that our seaports would now be more active in clearing vehicles even as the appropriate duties would be paid into government coffers, thereby enhancing non-oil taxes. If our ports remain inefficient and corrupt, the implication is for illegal importation to thrive and for the cost of imported cars that are largely used by the middle class to go out of reach. It is also hoped that this policy will serve as an incentive to local assembly plants by having improved capacity utilisation and creating more employment for Nigerians. • Mr. Rislanudeen Mohammed (A former Managing Director, Unity Bank Plc)

(Compiled by

Ifeanyi Onuba and Afeez Hanafi