- Ban on used car import through land corridors makes sense
It is not surprising that the decision by the Federal Government to ban the importation of used cars through the land borders with effect from January 1, 2017, has raised a lot of dust. In a country where the used cars trade is big business, and where access to brand new cars is limited to the wealthy, any measure designed to curb their influx is not only bound to be controversial but also likely to be interpreted as targeting the poor.
As it is, the Federal Government’s position is unassailable. It has an automotive policy in place which seeks not only to boost local auto-manufacture but to curb the indiscriminate influx of used cars into the country. That is not all. Benin Customs, which is mandated under a bilateral framework to ensure that used cars destined for the country are escorted and handed over to the Nigerian Customs at their end of the border have not been helpful; the result is that the country is not only denied the revenue that ought to have accrued to her, the tariff imbalance thus created ensures an unfair price advantage to those cars compared with those imported through the nation’s sea ports.
We are also aware of the opposing arguments. First is that the used car is for the poorer segment of the society. Second, the prices of new cars are simply unaffordable. Third, our ports are neither business-friendly nor competitive compared with the neighbouring ports. And fourth, the frustrating bureaucracy under which port operations are a daily nightmare; and not the least, the factor of corruption which ensures that the very systems put in place to curb abuses are subverted for private gains.
We agree that the Federal Government has a lot to do to improve on our ports operations. As far as we can see, a major kernel of the port reforms, which is competition, appears to have been jettisoned. That is perhaps the only way to explain why development of the alternative ports in Calabar, Port Harcourt and Warri has been rather slow. Given the state of affairs, we are forced to doubt whether the nation can be said to be truly ready for maritime business.
None of these will come by making our ports idle or feigning helplessness in the face of the brazen challenge to our sovereignty by the tidal wave of smuggling going on at our land borders. To be sure, not only is the Federal Government right to seek to control the influx of goods coming in – and this must be held as true for used cars, rice and any other item of trade – the absolute discretion to review bilateral agreements that have proven not only unworkable but injurious to national interests ought to be seen as the unquestionable prerogative of government.
As for the argument that the neighbouring ports are more business-friendly, that argument is neither here nor there since the importers are still expected to pay appropriate tariffs. The unfortunate reality is that the land borders would appear more prone to shady, under-the-table dealings. The challenge is to ensure that these goods do not find their way into the nation’s markets under any cover. This is where the Nigerians Customs have a major role to play.
As for the House of Representatives resolution asking the Federal Government to suspend the ban, it seems like one more instance of pandering to populism. It is neither helpful nor desirable.
At this time, what we need are incentives to encourage local auto-manufacture, massive investment in infrastructure and a financing framework to ease the process of acquisition – all of which are presently unavailable. These are what the lawmakers are best placed to help achieve.
