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Vehicle Ban: Nigeria Loses N1.36bn in One Month



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  • Nigeria Loses N1.36bn in One Month

One month after the Federal Government prevented imported vehicles from entering Nigeria through the land borders, stakeholders across board have started counting their losses.

Our correspondent gathered at the Seme border that the losses ran into billions of naira on the part of the government and the importers.

On Monday, December 5, the Nigeria Customs Service announced a ban on the importation of vehicles through the land borders in a move that followed a previous ban on the importation of rice through the same route.

The ban on vehicle importation through the land borders took effect on January 1, 2017.

It was gathered that the Seme Customs Command that was making a daily revenue of over N45m before the ban had lost over N1.36bn revenue in the past one month as vehicles coming through the land borders were no longer being cleared.

The command generated N1.2bn in November and N1.52bn in December 2016. On the average, it made N45.3m daily during the period.

Importers of about 50 vehicles that were trapped at Seme on the first day of the ban have still not been cleared to leave the border. The owners were said to have started documentation and the vehicles escorted from Benin Republic to Seme on December 31, 2016, a few hours before the ban became effective.

The Public Relations Officer, Seme Customs Command, Mr. Selechang Taupyen, told our correspondent that the vehicles were in the NCS custody, adding that by the time they were brought in, the official deadline had elapsed.

“There is nothing we can do about the cars; we can only wait for directive from the headquarters to release them since we had already started enforcing the ban on their importation through the land borders according to the directives given to us,” he explained.

He added that the stakeholders had written a letter to the Presidency seeking the release of the vehicles, noting that if the letter had come to the command officially, it would have been forwarded to the Customs headquarters for directive on their release.

A licensed clearing agent, Mr. Khally Momodu, told our correspondent that the owners of some of the vehicles had started documentation and even had their files with item, but they still could not get clearance to move their cars.

He said the reason was because most of the Customs officers who served in the command in 2016 when the vehicles were escorted there from Cotonou had been transferred out of the command and new officers who knew nothing about them were the ones currently serving there.

But the Deputy Comptroller of Customs at Apapa Area Command, and former Customs PRO, Wale Adeniyi, who had earlier maintained that the policy did not extend to people who started their documentation before January 1, 2017, gave an assurance that the NCS headquarters would release the vehicles since they had crossed over to Seme before the deadline.

In addition to the 50 vehicles, our correspondent learnt also that more than 1,000 others meant for the Nigerian market were trapped in neighbouring towns and villages to Cotonou after being removed from the port.

“There are many of these vehicles in Cotonou. The importers cannot send them back or bring them into Nigeria. So, they are kept in car parks and the owners have to pay for people to keep watch over them pending when they can be allowed to bring them in,” Momodu said.

On the loss of government revenue through the land borders, Adeniyi noted that the borders were not meant for revenue generation but were supposed to be for security, adding, “It is only people who have recently turned the borders to revenue generating organs. The seaports are there to generate revenue for the government.”

According to the Managing Director, Nigerian Ports Authority, Hadiza Usman, from 2010 to 2015, the country’s ports saw a gross tonnage of 144.2 million.

She added that in spite of the economic recession, an annual growth rate of about two per cent was   expected through the next five years.

“The direct contribution of the ports to the Gross Domestic Product presently stands at 0.01 per cent. Revenues have seen growth from N57bn in 2005 to N184bn in 2015. It can be more,” Usman said.

Meanwhile, the Public Relations Officer, PTML Customs Command, Tin Can Island, Lagos, Mr. Steve Okonmah, noted that it was too early to gauge the impact of the policy on the seaports.

But our correspondent gathered from terminal operators that the ban on vehicle importation through the land borders might not drive any significant volume of traffic to the seaports.

The Managing Director, PTML, which is the largest terminal for vehicles in Africa, Mr. Ascanio Russo, noted that the ban might not increase traffic of imported vehicles to the seaports because of the high cost of clearing vehicles.

Russo said while the ban was laudable, the government needed to follow it up by reviewing downward the import tariffs on cars as approved by the former administration as part of the National Automotive Policy.

An importer at the Tin Can Island Port, Emeka Harrington, told our correspondent that the cost of clearing a 2001 model of Sport Utility Vehicle before the hike in import tariff was about N300,000, adding that with the new tariff, the amount had increased to about N500,000.

In 2014, the government raised the import tariff on vehicles from 22 per cent to 70 per cent, a situation, which led to a drastic reduction in the number of cars that came through the nation’s ports and 85 per cent loss in revenue for the terminal operators.

The imposition of the new tariff, which also affects imported used vehicles, according to the government, is to encourage local assembling/production of vehicles.

But Russo argued that three years after the introduction of the policy, there had been no significant increase in the production or sale of locally assembled vehicles, adding that the vehicles were simply too expensive for the average Nigerian.

“The only way it can work is if the government created a finance scheme for people to be able to buy new cars,” he said.

Senators, during their recent plenary session, had criticised the ban, describing it as anti-poor.

In a motion moved by senators Barau Jubrin (Kano North), Kabiru Gaya (Kano South), Sabi Abdullahi, (Niger North), Shehu Sanni, (Kaduna Central) and Ali Wakili (Bauchi South), the lawmakers rejected the policy and asked the NCS to immediately suspend its implementation.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

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Trade Expert Calls For Increased Investments In AfCFTA to Boost The African Economy



African Continental Free Trade Area (AfCFTA)- Investors King

There have been calls for more investments in the African Continental Free Trade Area (AfCFTA) agreement to boost the African economy.

At a recent virtual conference organised by the African Public Relations Association (APRA), an expert on trade and finance, Mr. Jesuseun Fatoyinbo, Head of Trade, Transactional Products and Services at Stanbic IBTC Holdings PLC, highlighted the benefits of increasing investments in the AfCFTA agreement during one of the sessions held as part of the three-day virtual conference.

Jesuseun stated that the AfCFTA agreement will allow African-owned enterprises to enter new markets, expand their customer base and create new commodities and services in the continent. The agreement was created in 2018, and a total of 54 African countries have signed up. Of these, 30 countries have ratified the agreement and 28 countries have deposited their instruments of ratification.

AfCFTA holds great promise for the African economy as it seeks to eliminate tariffs on intra-African trade, making it easier for businesses to trade within Africa and benefit from its emerging markets.

Speaking on the impact of trade on economic development, Jesuseun said: “The status of intra-regional trade within the European, North American and Asian economic corridors is currently estimated at 64 percent, 50 percent and 60 percent respectively.

“However, the status of intra-African trade currently stands at 17 percent, which is significantly lower than other continental regions. This limits business investments within the African continent while increasing trade dependence on foreign markets.” He emphasised the need for improvement in order to expand the African economy.

According to him, increased investments between African countries will trigger trade growth in Africa which will, in turn, promote industrialisation, economic development and subsequently lead to increased employment opportunities across the continent.

Jesuseun advised stakeholders on the need to observe other continental trade trends, as continental trade usually yields positive results. He said, “All sectors need to be involved in AfCFTA to promote industrial development and sustainable socio-economic growth in order to deepen the economic integration of Africa.”

The Stanbic IBTC Head of Trade cited some nations in East Africa which were insulated from economic recession as a result of intra-trade activities. He noted that “despite the severe issues caused by the COVID -19 pandemic in 2020, Tanzania and Ethiopia avoided economic recession, due to their ever-improving trade policies.”

Jesuseun advocated the replication of their strategies across other African nations, to boost Africa’s income and lift millions of Africans out of poverty. Speaking on Stanbic IBTC’s capabilities to boost trade, he said, “Stanbic IBTC is leveraging world-class digital technologies to make commercial imports and exports easier. The organisation is committed to making trade processes seamless and easier with technology.”

The trade expert stated that the pandemic unearthed the possibility of remote verification as against the prevalent practice of physical documentation. He cited examples of African trade’s past experiences, where many trade processes had experienced inefficacies and bottlenecks because of physical documentation.

Jesuseun concluded that trade processes need to be digitized, to enable seamless multilateral trade between African countries. He urged other stakeholders to create awareness about the usefulness of the AfCFTA agreement.

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Ogun Records N13.3B Internally Generated Revenue Monthly in Q1 of 2021



Revenue - Investors King

Ogun State Government has recorded an average of N13.3billion monthly as Internally Generated Revenue (IGR) in the first quarter of 2021.

The government said it is also planning to raise its yearly Gross Domestic Product (GDP) rate from the current single digit by 25 percent.

The Commissioner for Finance, Dapo Okubadejo disclosed this to newsmen in Abeokuta ahead of the state’s investment summit tagged: ‘OgunIseya21: Becoming Africa’s Model Industrial and Logistics Hub’, slated for July 13th-14th, 2021.

Okubadejo who doubles as the State’s Chief Economic Adviser noted that the state’s IGR had experienced an upward movement after last year’s shortfall due to the Covid-19 pandemic and the attendant lockdown.

“We had a significant turnaround in the first quarter of this year. In fact, as of April, we have done almost N40bn in the Internally Generated Revenue. Our target this year is to exceed all the previous records we have set in IGR. That’s why we have put in place, all these transformation initiatives, friendly policies and also facilitate this investment summit to further showcase Ogun State as the preferred industrial destination,” he said.

The Finance Commissioner was supported in highlighting the investment potentials of the summit by his counterparts from the Ministries of Industry, Trade and Investment, Mrs. Kikelomo Longe; Works and Infrastructure, Ade Adesanya; Culture and Tourism, Toyin Taiwo; Budget and Planning, Olaolu Olabimtan and the Director-General, Public-Private Partnership, Dapo Oduwole.

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Unemployment To Push More Nigerians Into Poverty – NESG



Nigerian Economic Summit Group- Investors King

On Friday, The Nigerian Economic Summit Group said that many more Nigerians are expected to fall into the poverty trap amid rising unemployment in the country.

The NESG, a private sector-led think-tank, noted in its economic report for the first quarter of 2021 that the country’s economic growth in the period under review was relatively weak.

It said, “Nigeria’s economic growth trajectory is better described as jobless and less inclusive even in the heydays of high growth regime in the 2000s.

“While the Nigerian economy recovered from the recession in Q4 of 2020, the unemployment rate spiked to its highest level ever at 33.3 percent in the same quarter.

“With the COVID-19 crisis heightening the rate of joblessness, many Nigerians are expected to fall into the poverty trap, going forward.”

The group noted that the World Bank estimated an increase in the number of poor Nigerians to 90 million in 2020 from 83 million in 2019.

“This corresponds to a rise in headcount poverty ratio to 44.1 percent in 2020 from 40.1 percent in 2019. The rising levels of unemployment and poverty are reflected in the persistent insecurity and social vices, with attendant huge economic costs,” it said.

According to the report, huge dependence on proceeds from crude oil, leaving other revenue sources unexplored, indicates that Nigeria is not set to rein in debt accumulation in the short to medium term.

The NESG noted that public debt stock continued to trend upwards, with a jump from N7.6tn ($48.7bn) in 2012 to N32.9tn ($86.8bn) in 2020.

It said public debts grew by 20 percent between 2019 and 2020, adding, “This is partly due to the need for emergency funds to combat the global pandemic and alleviate its adverse economic impacts on households and businesses.”

According to the group, Nigeria needs more than an economic rebound, and there is a need to improve growth inclusiveness.

It said, “Nigeria has struggled to achieve inclusive growth for many decades. Since recovery from the 2016 recession, the economy has been on a fragile growth path until it slipped into another recession in 2020 due to the COVID-19 pandemic.

“This suggests that the country needs to attain high and sustainable economic growth to become strong and resilient.

“The relationship between economic growth and unemployment rate in Nigeria suggests that economic growth has not led to a reduction in the unemployment rate – jobless growth.”

The NESG said to reverse this recurring trend, there was an urgent need for collaborative efforts between the government and relevant stakeholders towards addressing the constraints to value chain development in high-growth and employment-elastic sectors, including manufacturing, construction, trade, education, health and professional services, with ICT and renewable energy sectors as growth enablers.

It noted that despite the re-opening of the land borders that the Nigerian government shut since October 2019, inflation reached a four-year high of 18.1 percent in April 2021.

“While we expect improved agricultural production in coming months to partially ease inflationary pressures, this positive impact could be suppressed by recurring key structural bottlenecks including insecurity in the food-producing regions, electricity tariff hike, fuel price increase and hike in transport and logistic costs,” it added.

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