Importers Of New Vehicles May Pay 25%More On Tariff By 2014

• NAC Says, No Ban On Importation of Tokunbo Vehicles

 Even as the nation awaits the implementation of government’s new policy on automobiles, strong indication has emerged to the effect that importers of new vehicles may pay at least 25 per cent more on tariff.
This indication was given by the Director-General, National Automotive Council, Mr. Aminu Jalal, who maintained that the new policy was meant to discourage the importation of fully built unit vehicles.
The move, according to him, is part of measures to develop the Nigerian automotive industry.
He however said that dealers could still clear imported vehicles at the old rates until February 28, 2014, provided “they can prove that they had opened a Letter of Credit for the vehicles before October 3, 2013.”The Federal Executive Council had on October 2 approved a new automotive policy that would compel all government agencies and ministries to buy made-in-Nigeria vehicles.
This was also an initiative to encourage vehicle manufacturers to establish production lines/assembly plants in Nigeria.
Jalal said Nigeria was on the path of rejoining the league of auto producing countries.
It was learnt that before now, the import tariff differential between FBU and Completely Knocked Down vehicles was about five per cent.
Auto manufacturers had often complained that the gap was too close and made it cheaper to import fully built vehicles than to produce locally.
Jalal said many international automotive manufacturers such as Toyota, Nissan, Renault and GM, had indicated an interest to invest in Nigeria with the announcement of a comprehensive automotive development plan.
He said, “Nissan, Toyota and others are now conducting feasibility studies on vehicle assembly in Nigeria.
“The elements of the plan, which will ensure competitiveness and increase productivity of the sector, are: industrial infrastructure improvements (automotive supplier parks and clusters), skills development, standards, investment promotion, market development and anti-smuggling measures.”
Jalal lamented that the nation was wasting N400bn on the importation of 200,000 used vehicles and 80,000 new ones annually even when it had the capacity to produce 150,000 vehicles, which could fetch a total of N550bn.
He added that the fact that the policy would be subject to periodic reviews would enable the automotive industry to achieve its potential for the Nigerian economy.
He, however, stressed that the policy would not result in the banning of the importation of vehicles.
“At full capacity, the Nigerian automotive industry has the potential to create 70,000 skilled and semi-skilled jobs along with 210,000 indirect jobs in the SMEs that will supply the assembly plants. 490,000 other jobs will also be created in the raw materials supply industries,” he noted.
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