• Resort to sale of refurbished automobiles• Nigerians importing fewer used automobiles as imports stoop by 83% in H1
As a consequence of shortage of international trade (FX), hikes in tariffs, will increase in import obligation and different associated points, vehicle sellers have lamented their lack of ability to import pretty used automobiles into the nation.
That is whilst they’ve now resorted to the recycling of Nigerian used automobiles whereas others have deserted the car enterprise totally. Talking with The Guardian, the President, Affiliation of Motor Sellers of Nigeria (AMDON), Prince Ajibola Adedoyin, mentioned the hike in taxes, gasoline and tariffs have affected the importation of automobiles into Nigeria.
In the meantime, Nigeria’s import payments on used automobiles, popularly referred to as ‘tokunbo’, fell by 83 per cent year-on-year to N138.62 billion within the first half of the yr, from N819.15 billion in H1’23.
Quarter-on-quarter, a breakdown of the Nationwide Bureau of Statistics (NBS) for the evaluation interval confirmed that in Q1 ’24 no used automobile was imported in comparison with N69.23 billion value of used automobiles that have been imported in Q1’23.
In Q2’24, the worth of imported used automobiles stood at N138.62 billion, representing an 81.5 per cent decline YoY from N749.92 billion in Q2’23. NBS famous that the used automobiles have been imported primarily from america of America, stating: “Alternatively, whole imports from America in Q2’24 stood at N971.84 billion.
Recall that final yr, the Federal Authorities launched a brand new set of taxes on imported automobiles, amongst different issues. The brand new tax regime stipulates that imported automobiles between 2000 capability (two litres) and 3999 capability (3.9 litres) engine can pay a further cost referred to as Import Adjustment Tax (IAT) levy of two per cent of the worth of the automobile, whereas automobiles with 4000 capability (4 litres) and above engines will appeal to IAT of 4 per cent of their worth.
The brand new levy is along with the 35 per cent import obligation and 35 per cent levy being paid by importers of automobiles. Nevertheless, automobiles under 2000cc, mass transit buses, electrical automobiles, and domestically manufactured automobiles are exempted from the IAT levy.
The federal government additionally revised the import prohibition record with the inclusion of used motor automobiles above 12 years from the yr of manufacture. In line with Adedoyin, the state of affairs has pushed a variety of importers out of the enterprise.
“The implication of that is that there could be safety-related points as a result of most of what’s occurring now’s recycling of Nigerian used automobiles.
“Importers can not herald automobiles as a result of excessive international trade charge. Other than the trade charge, there is a rise in import obligation, which we’ve got made clear to the federal government, is affecting us negatively and have requested that one thing be completed about it. The hike has had opposed results on our members as a result of it has chased a few of them away from the enterprise.
“Even whenever you purchase a automotive and promote it at a revenue, you can’t purchase one other one with the present value we use to import and that’s the reason some individuals have deserted the enterprise. The federal government must take pressing steps to handle the state of affairs,” he mentioned.
He mentioned if the federal government fails to do one thing about it, aside from the transportation that will probably be badly affected, the security of Nigerians and the financial system will probably be affected.
“The financial system is all in regards to the motion of products, companies and other people from one place to a different. That’s what types the financial system. So, something that impacts transportation impacts the financial system of the nation,” he mentioned.
He warned that the implications of recycling outdated Nigerian used automobiles are the opportunity of a rise within the charge of accidents as a result of they’ll undergo from put on and tear, inflicting them to interrupt down.
