Uncertainty Over 2023 Elections, Age Limit, Others Cause Drop in Importation of Vehicles At Nigerian Ports

By DAPO OLAWUNI

There are indications that importation of vehicles has dropped drastically at Nigerian ports, even as the operators have blamed the situation on the uncertainties surrounding the forthcoming 2023 general elections as well as the increase in Dollar exchange rate.

Recall that the Nigeria Customs Service had in May 2022 announced changes in the age limit of vehicles coming into the country from 15-years down to 12-years, warning that henceforth, any importer that brings vehicles older than 12-years shall be impounded.

Investigations carried out by DAILY TREND at the Tin Can Island Port and the PTML Terminal in Lagos equally showed that reduction in the age limit has caused importation of vehicles to reduce drastically.

According to findings, any old vehicle models between year 2000 to year 2012 are now considered over-aged cars, and are now made to pay the tariff of 2013 vehicles.

Meanwhile, licensed customs agents have been divided over the VIN Valuation of customs as cause for the drop in Importation of vehicles. Some of them argued that not less than 20,000 units of vehicles have been abandoned inside the various terminals and awaiting customs auction.

A visit to the various vehicle terminals at Tin Can Port, PTML Terminal, Car Park C and Mile 2 showed that the attendant crowd at these various terminals has dropped. In the past, not less than five clearing agents could be chasing after one single entry for a used vehicle, all in the name of “food for the boys”

However with the new customs policy, the crowd usually besieging the port on daily basis has reduced.

Speaking with DAILY TREND, Secretary of Association of Nigerian Licensed Customs Agents (ANLCA) at Tin Can Port, Barr Michael Imonitie Ovien states that various factors are responsible for the lull in vehicle importation. According to him, many importers are being skeptical to invest their money in any importation for now, due to uncertainties of the 2023 elections.

He also said that global freight rates have increased and that vehicles are no longer available abroad as it used to be.

“The low importation of vehicles is not from Nigeria alone, the low turn out of vehicles started from abroad, freight rates have increased, and a lot of Importers need directions on where to invest their money, you cannot invest when there would be no gain

“The major issue here is that the freight rates has increased, the Dollar exchange rate has spiked.

“The aspect of VIN Valuation did not really affect vehicles because the prices are very okay, apart from the levy that is attached to it. Before now, we pay 35percent duty rate, and now, we pay 20percent duty rate and 15percent levy, this brings it all to 35percent.

“As for the interface with customs, the VIN Valuation has really reduced that interface, in a situation whereby you would need to visit customs, write application for ex-factory price, all these windows have been closed, especially for standard VIN.

“We expect a turnaround in importation as soon as the country is stabilized, the election coming in 2023 has caused a lot of Importers to be watchful, they don’t want to be caught in-between, they need direction for their money” he said

Barr Ovien said that freight rates on vehicle importation before now were between the range of $1,000, but now it has increased to$2,000.

He also lamented that the shipping lines that were bringing not less than 3,000 units of vehicles to Nigerian Roll-on Roll-off terminals have now reduced their shipments to just 300 units and below.

According to him, it is not true that vehicles were abandoned at the ports due to VIN Valuation policy of the customs.

“There is a standard procedure for clearing of vehicles, after twenty eight days, your vehicle becomes overtime or abandoned. Abandoned means you have accessed the vehicles but failed to clear it due to one issue or the other, overtime is when fail to make any declaration on the vehicle.

“The exchange rate is not only applicable to Nigeria alone, international trade is what is playing out here, if the exchange rate is stable, people would definitely import,as at today, it is N800 per $1.
For now the dollar has a very strong effect on importation” he said

Also confirming to DAILY TREND the true situation of things at the port, Public Relations Officer of the PTML Command of Nigeria Customs Service, Mr Mohammed Yakubu said it is not true that 20,000 vehicles were abandoned at the port, describing it is “a big lie”.

Yakubu said it was true that Importation of vehicles has dropped drastically, but that a lot of factors are responsible for this.

According to him, availability of vehicles abroad has reduced because new vehicles manufacturing has equally reduced.

“Yes, cargo throughput has dropped drastically, but there are so many factors responsible for this, not the VIN Valuation. We have the exchange rate factors, it is a global issue.

“Down there abroad, people are complaining that they don’t get cars to ship over as they normally do before now, people that are using vehicles in America sometimes use their car for two years after which they give it out for sale.

“But now, there is no more new cars coming onboard, they now use their vehicles for longer years of four years, definitely, all these has caused a drop in importation, it is a factor.

“The real importers would tell you that cars are now costly abroad, the exchange rate has also increased.
We cannot just base our argument on VIN Valuation” he said

In terms of revenue, Yakubu said that between January to September 2021, the command generated N165billion, compared to January to September of 2022, the command generated N182billion with appreciation of N17billion.

“It shows that we have generated more revenue than what we did last year despite the cargo throughput” he added.

In his part, Chairman of ANLCA at PTML Terminal, Elder Oluwole Obe lamented that before now, 80percent of vehicles coming into Nigeria comes from Tin Can Port, but that the ports are currently dry and there are no jobs to be cleared.

According to him, many of the old vehicles are now finding their way into Nigeria through Cotonou Port.

“The duty rate is majorly the reason for the drop in importation. Most of the vehicles coming into Nigeria are below 2013, and today if you are bringing any car lower than that into Nigeria, you are paying a duty of 2013.

“Due to this, nobody is ready to bring in 2010 or below to come and pay a higher duty. So right now, most of the vehicles are passing through Cotonou Port, and we know that they would still find there way back into Nigeria.

“The ports are very dry now, there is no work at the port again. It is about the policy of the government, and we are clamouring that government should have a rethink about it” he said