As Nigerians rejoice over APC’s victory at the presidential polls, the emergence of General Muhamadu Buhari as President was received with a pinch of salt in some business circles. GBUBEMI GOD’S COVENANT SNR reports that importers of used vehicles are unsettled with Buhari’s victory.
With only twelve weeks to the implementation of the 35 per cent import levy on used cars, importers of tokunbo vehicles are faced with another uncertainty as a new government warms up to take off on May 29th, 2015, thirty two days to the implementation which has been shifted two times since February 2014.
Daily Times investigation revealed that apprehension is rife among the big and small time importers that the incoming government of General Muhamadu Buhari may scrap used vehicle importation into the country altogether.
The first phase of the policy, involving payment of the 35 per cent duty was to have begun in February 2014, but the Federal Ministry of Finance, through a circular to the Director-General, National Automotive Council, Mr. Aminu Jalal, had deferred the implementation to June 30. No reason was given for the postponement.
At the time the implementation of the second phase was first moved from July 1, 2014 to January 1, 2015, Daily Times gathered recalls that government had said it was to enable local vehicle assembly plants to ramp up production in order to meet the nation’s demand for brand new vehicles.
When it was deferred again to April 30, 2015, the Federal Government through NAC, an agency of the Federal Ministry of Industry, Trade and Investment, said that the postponement was due to the delay in establishing a vehicle finance scheme.
Throwing some light into the reasons for the delays recently, D-G Jalal said the arrangement for the establishment of the affordable vehicle finance scheme suffered a delay of about four months due to the Ebola Virus Disease.
“The staff of the collaborating bank, Westbank of South Africa, delayed their planned trip to Nigeria to set up operations from September 2014 to January 2015; hence, the new date for the start of operations of the financing scheme was fixed for April 2014. Accordingly, the Minister of Finance was directed to extend the levy deferment on used cars to April 30, 2015.”
Chief Reuben Obi, a major importer based in Ikeja told our correspondent they received the victory of General Muhamadu Buhari with shock. “We didn’t think it will happen; under the PDP government, business has been negotiable for a long time and we had brazed up to accommodate the 35 per cent increase. But with General Buhari, we just don’t know what he is going to do; although he is now a civilian president, once a military man, always a military man.”
“Judging from his records, the President-Elect may scrap the policy and may ban importation of tokunbo vehicles outright,” feared Mr. Chuks Azubuike, another importer on Western Avenue on Lagos Mainland. “Our association held a meeting after the election and we decided to just wait and see what the new government will say, whether they will implement the 35 per cent increase or scrap importation completely.”
It would be recalled that the Federal Government, in a move to encourage local assembling of vehicles, had in September 2013 raised the import tariff on fully-built cars and used vehicles from 22 per cent to 70 per cent made up of 35 per cent duty and 35 per cent levy.
It also announced a zero per cent tariff on Completely Knocked Down units (vehicles) and five per cent to 10 per cent on Semi Knocked Down units.
Nigeria imports about 400,000 units of vehicles annually, with about 300,000 being second-hand. As a result of the devaluation of the naira and the subsequent rise in the cost of buying used vehicles and clearing them at the nation’s seaports, auto dealers in the country have reduced the volume of importation by over 60 per cent.
Also, the largest terminal for vehicle imports in the country, Port and Terminal Multi Services Limited, has recorded a record drop in the volume of imported vehicles since the policy was first announced.