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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 Investing.com, with over a decade experience in the global financial markets.

Economy

FG Launches E-ticketing Platform to Deepen Train Usage and Convenience

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FG Launches E-ticketing Platform to Deepen Train Usage and Convenience

In a bid to improve the usage and enhance the convenience of train transport in Nigeria, the Federal Government on Thursday announced the launching of the Electronic Ticketing platform for the Kaduna-Abuja rail services.

The N900 million E-ticketing platform was introduced by the Minister of Transportation, Chibuike R. Amaechi, and the Nigerian Railway Corporation.

Amaechi said the new platform would improve efficiency, promote accountability, reduce leakage and enhance economic growth, as well as save time.

The E-ticketing platform was a Public-Private Partnership project done in conjunction with Secure ID Solutions, who provide and would manage the system for 10 years in an effort to recoup its investment before the Nigerian Railway Corporation take charge.

Kofo Akinkugbe, the Chief Executive Officer, Secure ID Solutions, said as the new E-platform issued 25,000 tickets after a successful pilot test on Thursday.

Potential Travelers can book via three ways:

1. Mobile app
2. Website
3. POS or Cash at the station

A validator would be used to scan the ticket barcode to ascertain its authenticity before boarding.

Amaechi further announced that self-service ticket vending machines at various train stations would be introduced soon.

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Economy

Nigeria’s Excess Crude Account (ECA) Balance Now $72.4 Million

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Zainab Ahmed Finance Minister

Nigeria’s Excess Crude Account (ECA) Balance Now $72.4 Million

The Minister of Finance, Budget and National Planning, Zainab Ahmed, on Thursday said Nigeria’s Excess Crude Account (ECA) stood at $72,411,197.80 as of January 20th, 2021.

The minister disclosed this at the first National Economic Council (NEC) meeting of the year presided over by Yemi Osinbajo, Vice President and had in attendance State Governors, Federal Capital Territory Minister, Central Bank Governor and other senior government officials.

Ahmed said “Excess Crude Account (ECA), balance as at 20th January, 2021, $72,411,197.80; Stabilization Account, balance as at 19th January, 2021, N28,800,711,295.37; Natural Resources Development Fund Account, balance as at 19th January 2021, N95, 830,729,470.82.”

The minister also said President Muhammadu Buhari has approved N6.45 billion for the setting up of gas plants in 39 locations nationwide in an effort to increase COVID-19 treatment.

What is Excess Crude Account (ECA)

Excess Crude Account (ECA) is an account used to save the disparity in the market price of crude oil and budgeted price of crude oil as stipulated in the Federal Government Appropriation Bill.

Key Takeaways of Excess Crude Account (ECA)

  • Excess Crude Account (ECA) was established in 2004 by the Federal Government to stabilize Nigeria’s economy and smooth out the effect of crude oil fluctuation on Africa’s largest economy.
  • The ECA rose to its highest of $20 billion in November 2008 during the global oil boom when prices were above $100 per barrel.
  • Controversy, allegations of corruption, and uncertain performance have trailed the ECA since creation.
  • The balance plunged from $20 billion in 2008 to $72.4 million in January 2021.

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Economy

AfCFTA: Nigeria Customs Service Requested For Detailed Role In The Free Trade Agreement

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AfCFTA: Nigeria Customs Service Requested For Detailed Role In The Free Trade Agreement

Nigeria Customs Service (NCS) requested for a proper and detailed role expected to be carried out in the implementation of the African Continental Free Trade Area (AfCFTA) agreement.

The NCS said detailed explanations of roles and responsibilities of all parties involved in the free trade agreement should be spelled out to avoid overlapping of duties and to achieve a seamless implementation of AfCFTA.

Mr. Joseph Attah the Public Relations Officer, on behalf of the Comptroller-General of the NCS, Col Hameed Ali (Rtd.), issued a statement to address the call for a detailed role of the Customs.

“Our functions are highly automated and primarily systems-driven, hence the need to methodically harvest and integrate all data associated with AfCFTA into our system for easy deployment, access, and use by the trading public.

“We, therefore, await the National Action Committee (NAC) on the list of duties and charges waived for liberalised goods under AfCFTA. The list of the 90 percent liberalised national trade offers (NTOs); list of the 70 percent non-liberalised exclusive goods at the regional level; and list of the 3 percent non-liberalised sensitive goods.

“The appointment of a competent authority responsible for issuing and authenticating certificates of origin and registering enterprises and products within the region.” He said.

In the statement, NCS pledges commitment to the success of the trade pact and also identifies the transformational impact the free trade agreement would have on businesses in Nigeria and the Africa continent at large.

“Also, it is pertinent to inform the public about steps which must be taken to enable its smooth and full implementation,” He added

NCS recommended that the member-country of the free trade agreement should have a representative in the continental chamber, this is to ensure transparency and build the confidence of the members in the system.

“This, in our view, should be complementary to the activities of the various chambers of commerce of each country in the region. While awaiting clear directives concerning tariffs for all goods covered by this agreement, we want to assure the public of our preparedness to fully deploy our services at the shortest notice.

“Our desire is to imbue trust in the system while guaranteeing the economic safety and wellbeing of businesses within the country,”  NCS noted.

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