Three months after the ban on importation of vehicles through the land borders serious activities are yet to resume at the nation’s sea ports writes SUZAN NWACHUKWU AND YUSUF BABALOLA
hen the federal government placed a ban on importation of vehicles through the land borders three months ago, stakeholders have expressed divergent views. While some see it as a welcome development large chunk of the stakeholders believed it won’t yield the appropriate result unless government review the Customs tariff payable on used and new vehicles through the seaports.
It was widely believed that if well harnessed, the policy will inevitably increase the revenue of government through the Nigerian Ports Authority (NPA), the Nigeria Customs Service, NCS as well as terminal operators.
But, three months down the line, the policy has assumed a snail speed with importers still reluctant to embrace it to full. Stakeholders at the ports share mixed reaction on the progress, so far with policy implementation.
Investigations revealed that prior to the ban, the seaports were badly hit by hikes in import duties imposed by the previous administration. Before now, to clear your vehicle at the ports, the Nigerian Custom would simply consider the size of your vehicle and the year it was manufactured to determine the tariff to be paid. This meant that newer models of vehicles usually attracted higher amount of clearing fees. For instance, a 2002/2003 model of SUV may clear at N360,000 while a 2013/2014 may clear at about N900, 000. However, the new custom tariff which became operational in 2015 saw a hike in customs duties. In place of size, the overall cost of vehicles is the new determinant of the amount of duty to be paid. In line with that, 35 per cent customs duty and another 35 per cent levy are charged for both new and old cars, making it a total of 70 per cent in total. This means that a car purchased for 2,000,000 will be cleared with 1,100,000.
Data available at the Nigerian Ports Authority (NPA) archive has also shown a steady decline in the number of vessels that entered Nigeria up till September 2016.
To help facilitate activities at the sea ports and reduce the activities of smugglers, the implementation of the ban on importation of vehicles through the land borders was immensely carried out. Stakeholders in the sea ports hailed the move and expected that the hikes would be reviewed to attract investors. They also expected huge stabilization of the currency against the dollar, which according to them will remove uncertainties in the business.
General Manager, Ports and Terminal Multiservices Limited (PTML), Tunde Keshiro said the land import ban policy had positively affected their business.
He said, “Given the low traffic size of nearly 2years and inconsistent government policy, concerns should be on how to sustain the flow of cargo into Nigeria. The policy is of positive impact as we are recording increase in the number of vehicles landing at the terminal.
”We therefore have to look at the components of the cargo clearance costs at the port that tend to cause high charges to the importer that stand to affect the landing price as well as market value of the imported vehicles. “
Vehicle importers, freight forwarders and clearing agents are yet to resume full blown activities at the sea ports. Some of them shared their experiences.
A car dealer/importer at Agha Motors, Demian Onwuegbokwu on his personal experience three months after the policy, said “The ban on importation has not had much positive improvement on the seaport. Most importers are waiting for what will happen next. Most of us right now rely on people who send car from overseas and then help them sell it. When you visit the Tincan and Apapa ports and others, you will see everywhere empty unlike before where there would be cars everywhere”
“The government just wanted to create unwanted hardship to people, because since after this policy what we have been managing to do is to buy accidental vehicles and repair. Most of the vehicles we have been able to purchase through the seaports still have to go through the workshops before we can put them out for sale. The action wasn’t too good for us; when you go to Cotonou, you can see and select what you want to buy and make a good choice but here we have no choice. Anyone that has a little accident are brought in as accidental car and cleared at cheaper price.”
According to him, the government is denying itself of the little income that is supposed to be coming its way as a country. “How many cars do we even import through the sea, a lot of people are not importing right now because the price of exchange is not even steady, there is uncertainty and we only take risk to import and manage the little profit that comes in. the business is not lucrative right now. Iif they can open the land boarders and plan it properly and make sure that what is accrued to the government goes to the government, everyone will be satisfied” he said.
On the cost of clearing vehicles at the ports, Mr Onwuegbokwu said if the government can peg the cost of clearing one vehicle irrespective of its model at a steady price like other countries are doing, it will be better. “For instance in Cotonou, any vehicle that lands there is cleared with 500000 CFA (approximately 250,000) irrespective of the model. There are things other countries are doing that are worth emulating, but the case is not the same here in Nigeria, here the prices just keep changing. The government needs to get down and plan the economy properly” he added
Public Relations Officer, Association of Nigerian Licensed Customs Agents (ANLCA), PTML chapter Sulaiman Adeola, said “It is expected that after ban of vehicles at land borders there is supposed to be an increase in the numbers of vehicles that come through our PTML because 80 per cent of vehicles that come into Nigeria came through PTML. We believe very soon there will be good news but for now there is an increase but not significant yet.
On how to boost vehicles import traffic to the port, Sulaiman said, “At a stakeholders meeting with Grimaldi, Customs and clearing agents a representative of vehicle importers said Grimaldi in Germany decided reduced their rate by 40 per cent but why is Grimaldi Nigeria increasing their fare. So importers have to do their calculations. Grimaldi rate must be competitive to attract importers to the port
Speaking on smuggling, Sulaiman said there is need for Smuggling to be on the rife because it is reasonable to think that after ban, it is expected for smugglers to devises means to bring in vehicles into the country but if the land borders and NADECO routes are blocked, there will be significant increase at the PTML port.
Elder Oluwole Obe, of the Association of Nigerian Licensed Customs Agents (ANLCA), PTML chapter
Vehicles importation has improved at PTML but not significant because ships that registered with Grimaldi comes to the port. We know the 80per cent of vehicles imported into Nigeria come through PTML but we expect that very soon things will get better.
Sharing similar view, a car dealer, Tony Oregta of Tony Motors said agreed that there is slight improvement in activities around the sea ports but added that things are still very dull around the port. “More cars are coming in but the major problem is with the economic crunch in the country. Let them have a steady or fixed price for clearing vehicles and you will see how people will make a turn way to Nigeria ports. As importers, it’s not like we love going to Cotonou, we want to use our own ports but bureaucracies are hindering us. For instance, in Cotonou, they clear you in one day, but here, it takes three or more days.” he said.
To attain a level of competitiveness commensurate with a Giant of Africa as its fondly called, Nigerian government and other stakeholders in the port business must as a matter of urgency remove all unnecessary impediment to safe but progressive businesses transaction.
