Nigeria: Ban on vehicle land imports faces rocky road

By Rafiu Ajakaye

LAGOS, Nigeria (AA) - All vehicles coming into Nigeria will go through the country's seaports starting in January, the government announced this week, officially banning imports of automobiles through its notoriously porous land borders.

But the announcement has been greeted with public uproar, because Nigerians are known for importing mostly second-rate vehicles through the border with Benin, the nation’s small neighbor to the west.

The government said the step was taken due to significant diversion of government duties on vehicles imported through the land borders. Customs spokesman Wale Adeniyi said the policy is meant to boost government revenue as well as promote the country's car industry.

He said customs revenue from vehicle imports now hovers at around N88 billion ($284 million), down from over N144 billion ($465 million) in 2014, blaming the fall on smugglers and the diversion of duties.

“The government made an agreement with Benin’s government on international transit protocols but it was being breached by our neighbors who don't remit our customs revenue,” Adeniyi told Anadolu Agency.

“So it is in our national interest that this decision was made, and we urge our citizens to commit to this strategic national interest,” he added, alleging widespread unwillingness by importers to pay duties at the country's ports.

The other leg of the policy, Adeniyi said, is a fresh tax on new vehicles from South Africa. Many automobiles assembled in Pretoria end up in Nigeria. Local officials say this partly explains why the country's automotive industry has been comatose, in contrast to the growth of the 1970s and ‘80s.

Some have hailed the policy. The influential Lagos Chambers of Commerce and Industry, for its part, described it as a step needed to rev up revenues and revamp the economy long-term as Nigeria battles recession and struggles to meet its obligations.

Vicky Haastrup, head of Nigeria’s Seaport Terminal Operators Association, hailed the decision, which he said would rejuvenate specialized car import terminals.

“No doubt thousands of jobs lost at the seaports will be restored. Revenues will also go up,” he told Anadolu Agency.

He added, however, that government must take steps to address the factors that made land imports more attractive.

“We urge the government to reverse the 70 percent tariff the last administration introduced to the old 20 percent. That hike no doubt contributed to a huge loss of revenue here because many people opted to import vehicles through the ports of neighboring countries and then bring them through the land borders,” he added.

- ‘A knack for doing things wrong’

Critics say the policy would be counterproductive, as corrupt officials would continue to collude with businessmen to perfect smuggling. Some say the policy will hurt the poor and middle class, who buy used vehicles as they can’t afford new ones, and worsen the poverty rate since many businesses are at risk.

For some analysts, the policy is a setback for the regional economic unity championed by the Economic Community of West African States (ECOWAS). Both Nigeria and Benin, whose economy thrives on huge patronage from Nigerians, are members of the bloc.

“I think we seem to have a knack for doing things completely wrong. The question we need to ask is, why are people smuggling in cars and other items from a country with a population smaller than Lagos?” asked renowned economist Tunji Andrews, referring to Nigeria’s capital. “Well, simply because they have made imports easier,”

“We haven’t moved to fix this but choose to ban [imports] as we usually do,” he told Anadolu Agency, predicting that the government will reverse itself on the policy.

A Nigerian border police officer who asked not to be named due to restrictions on speaking to the media echoed that assessment, saying the policy was not well thought out.

“Nobody likes to go through the local seaports because of issues like excessive charges, needless delays, difficult documentation, poor access roads, and the way some vehicles that are imported through the Benin border can’t get through our seaports because they’re too old,” he told Anadolu Agency, as officially, cars more than five years old cannot be imported.

-Incentives, not bans

Nigeria’s House of Representatives has asked President Muhammadu Buhari to reverse the ban, warning it will only lead to dwindling revenues and higher poverty.

“The House urges the government to install border security and surveillance equipment for effective monitoring to address the recurring menace of smuggling and ensure a maximum revenue generation on all lawfully imported goods,” said a House resolution on the issue passed Thursday.

The resolution followed a motion by a ruling party lawmaker, Abdullahi Salame, who said the policy will see many car dealers go out of business, with a potential for higher poverty and crime rates.

“In fact I can’t believe that we can stop people from skirting the law by simply legislating a ban. We should have policies and incentives that discourage people from importing cars or other commodities through unsafe and porous borders,” Salame told Anadolu Agency shortly after his motion was passed.

He said a similar ban on imports of food staples had provoked public anger through rising food prices. “Rice is one example. From a bag costing around N9,000 in early 2015, it now goes for roughly N20,000. People still smuggle them into the country in spite of the ban,” he said.