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

• 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.