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Home NEWS Nigeria Chamber of Commerce Thumbs down Nigeria’s Auto Policy

Chamber of Commerce Thumbs down Nigeria’s Auto Policy

…Calls for Reduction of Vehicle Import Duties

[dropcap]P[/dropcap]resident Muhammadu Buhari-led government has been urged to urgently review Nigeria’s auto policy, as part measures to facilitate the nation’s economic growth.

The Director-General of The Lagos Chamber of Commerce and Industry (LCCI), Mr Muda Yusuf, who  made the call recently in an interview, argued that the policy had affected the nation’s economy negatively, as against the original objective of the architects of the policy.   .

According to him, the policy, which raised tariff on imported cars from 20 per cent to 70 per cent, had put the cost of vehicles beyond the reach of many individuals and corporate bodies.

“There is the need to act quickly to reverse the unsavoury situation,” he said. “The automotive policy was introduced in 2013 as a strategy to reduce importation of vehicles and boost the capacity of domestic automotive assembly plants.

“The automotive industry was hit by double shock of currency depreciation; a great deal can be done about the policy, which is a creation of government.”

According to Yusuf, years into the implementation of the policy, much progress had yet to be made.

“The affordable vehicles promised at the inception of the policy are yet to be seen. The economy has suffered incalculable consequences and shocks as the cost of vehicles reached levels that are unprecedented in the history of the country.

“Virtually, all aspects of our economic and social lives have been adversely affected by the situation, because of the 90% of the country’s freight and human movement are done by roads, which implies heavy dependent on cars, commercial buses and trucks. Manufacturers and other real sector investors suffer from sharp increases in haulage cost, because of the high cost of trucks; school buses have become unaffordable by many institutions.

“Many hospitals cannot afford new ambulances; many corporate organizations have drastically cut down their fleet. Car ownership is now completely beyond majority of the middle class.

He said the consequences of the policy on the economy and welfare of the citizens were immeasurable.

According to the LCCI Director General, the cost of vehicles rose by between 100% and 400% due to the policy.

“A new car of 1.8 litre engine capacity now costs as high as N18 million. 2-liter engine capacity costs N20million. And a new 3-litre Japanese car costs as high as N30 million. A 30-seater bus costs about N45 million. And 18-seater bus costs N29 million. Not many investors and citizens have the capacity top absorb these outrageous prices.

“Even big corporate organizations are now buying used vehicles. This scenario is most inappropriate for an economy that is heavily dependent on road transportation.”

Yusuf added that the policy had caused loss of maritime business and increased smuggling, due to high import duties and levy with the huge duty differentials compared with those of neighbouring countries.

“The also caused huge loss of custom revenue due to reduction of vehicle importation,” he said.

The Director General also said that the policy resulted in the increased cost of transportation, which affected all the sectors of the economy.

“Import duties on commercial vehicles and used cars should be reviewed downward to 20%,” he advised. “Complete Knocked Down (CKD) and Semi Knocked Down (SKD) should all attract zero duties.”

According to Yusuf, the government should grant further tax concession and waiver to the assembly plants and retain incentives for machineries and tyre industries, as contained in the policy.

Yusuf said that similar incentives should be extended for local production of vehicle spare parts. He urged the government and its agencies to encourage patronage of locally assembled vehicles to boost growth in the industry, adding that review of the policy would restore jobs in the automobile industry and boost activities in the maritime sector.

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