Importations decline, as abandoned vehicles litter Nigerian seaports over high tariffs
Many foreign-used vehicles imported into Nigeria have been abandoned at vehicle terminals in Tin-Can Island Ports Complex, Apapa, according a Leadership report.
The daily claimed this was due to the instability and volatility of foreign exchange in the country.
Aside from abandonment, vehicle Importation has gone down drastically due to the same reasons.
It was gathered that the abandonment was as a result of the increase in exchange rate for Customs clearance by the Central Bank of Nigeria (CBN).
The report said since the start of the administration of President Bola Tinubu, the CBN has increased the exchange rate for cargo clearance seven times:
“On June 24, 2023, CBN adjusted the exchange rate from N422.30/$ to N589/$; on July 6, 2023, it was adjusted to N770.88/$; on November 14, 2023, it was adjusted to N783.174/$; in December it was adjusted to N951.941/$; on February 2, it was moved to N1, 356.883/$; on February 3, it was raised to N1, 413.62/$ and on Friday, February 9, 2024, it was raised to N1,417.635/$”, the report claimed, adding that “clearing agents told our correspondent that, at present, it cost N20 million to clear a 2022 Lexus RX 350 model from the seaport and N3.4 million for a 2006 Toyota Corolla.”
The public relations officer, PTML command of the Association of Nigerian Licenced Customs Agents (ANLCA), Ayo Sulaiman, was quoted to have said from June 2023 till now, vehicle clearance cost has gone up by over 120 percent, thereby affecting importers’ forecast.
Sulaiman, however, said vehicle importation into the country has gone down drastically while importers are currently abandoning them over clearance costs.
“We can all testify that from December 2023, vehicle Importation dropped by 50 percent, and currently it has dropped to 30 percent and that’s why the Customs Service is trying to give incentives on values and duty on imported vehicles. So, for the service to go the extra mile, it showed that there is a problem.
“Also, if you enter some terminals, it’s like a football field; go to Grimaldi, a five-star terminal, it’s something everyone can see, it’s not hidden: importation through the seaports has gone down drastically. The incentive is work in progress; they want to encourage vehicle importers because if people don’t come up to pick their vehicles, the owners and Customs will lose even when it’s eventually auctioned; it’s not in the best interest of the importers, so Customs wants to give importers the right of first refusal by giving incentives. That’s to show you things are not well with importation of vehicles at the port,” he stated.
Explaining why importers are abandoning their vehicles at the seaports, Sulaiman, said that exchange rate volatility had ruined their forecast.
“Importers are currently abandoning their vehicles because when an importer imports one or two vehicles in December with the hope of clearing at N951/$, only for the vessel to berth and the exchange rate for clearance has been adjusted to N1,417/ $1, how will such person get the fund to cover the huge disparity?
“And, if such a huge disparity is factored into the vehicle, how much will they sell such a vehicle after clearance?” he asked.
“Some people discovered that the duty and terminal charges are more than the value of the vehicles, then they will abandon it in the port,” he pointed out.
Sulaiman further disclosed that because Nigerians cannot afford imported used vehicles, they now go for Nigerian-used vehicles.
“Currently in Nigeria, the auto industry is not for the middle-class again and Nigerians now go into third-party purchases. These are people getting Corolla, Camry of whatever year before, now they are finding it difficult to buy, but buying Nigerian-used because that’s what their capacity can do; it’s about purchasing power.”
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