On hasty implementation of the automotive policy – The Guardian

The implementation by the Federal Government of an aspect of the new automotive policy that raised duty paid on imported vehicles without first putting the necessary structures on ground is patently wrongheaded. By putting the cart before the horse, thus imposing more hardship on a beleaguered and weary citizenry,  the insincerity and insensitivity of this government are now beyond compare. The raised import duty should be reversed forthwith in the interest of sanity in the system.

Raising the duty on imported cars under the automotive policy is predicated on first rolling out the promised “Made in Nigeria cars” after reactivating the comatose automotive plants as well as setting up new ones. But by this action, it seems that the aim of the policy is simply to raise import duty on imported vehicles and not to manufacture new cars. President Jonathan needs to quickly disabuse the minds of Nigerians; otherwise, the policy would be interpreted as blatant deceit. 

Over the years, Nigerians have been treated with contempt by successive governments who make empty promises that are never fulfilled.  The result is that quite often, hopes are raised and later dashed. The nucleus of the automotive policy is to revolutionise the industry in the country by producing affordable made in Nigeria cars. Under the policy, apart from reactivating comatose auto plants like Volkswagen, Peugeot, Steyr, Leyland, ANAMCO, among others, government would seek to partner with renowned foreign automobile manufacturers to set up plants in Nigeria. In this regard, there have been high level meetings between President Jonathan and the chief executives of NISSAN, Renault and others.

   The expectation is that by the time new vehicles start rolling out from the factories, it would be needless to continue the importation of used vehicles into the country. And to ensure that people are discouraged from importing or buying second hand cars, a 70 per cent import duty is imposed on imported cars. The choice would then be left to consumers to patronize locally produced cars at affordable price or pay exorbitant duty if they choose to import.

   There is no doubt that this automotive policy, if pursued vigorously without hitch, would take a while to mature. Given the unconducive environment engendered by poor infrastructure, abysmal power supply situation, high overhead cost, lack of technical manpower, among others, the plan is not something that can be realised by executive fiat. Both the government and the people must therefore exercise patience to allow things work out sequentially. How long it takes to mature would depend on how committed government is to the policy.

   In the meantime, second hand vehicles would continue to be imported and used under the extant regime in order not to ground the economy and impoverish the populace. President Jonathan had assured that the implementation of the National Automotive Policy would not inflict pains on the people. Against this background, the imposition of the 70 per cent tariff, made up of 35 per cent duty and 35 per cent levy on imported vehicles since May, 2014 when no automobile plant has been reactivated and new vehicles are yet to roll out raises serious doubts as to the sincerity of government. 

   Unfortunately, the Nigerian Customs Service (NCS) appears to be in the forefront of implementing the new tariff, apparently without legal backing. For instance, the Customs had earlier introduced the new tariff which generated intense controversy and protests by Customs licensed agents, who questioned the rationale for the duty. Government quickly reversed itself and shifted the commencement till July 1 this year.

   But without waiting for the new date, the Customs re-issued another circular in February to its rank and file with instruction to commence the implementation immediately. This back and forth movement of the Customs shows that it is acting without legal basis on the new import regime. This needs to be challenged in the law court to save Nigerians from undue exploitation.

   What is the basis for implementing the new import regime now?  It is still premature. The July 1 target is ill-conceived and should be discarded. First things first. The automobile industry must first be revitalised. 

   Prior to the collapse of Nigeria’s automobile industry Nigeria had reached about 45 per cent local content in vehicle manufacturing. The idea of an automobile policy is good as it would promote industrialisation if implemented conscientiously. But the right sequence has to be followed in the public interest. What is being done now is anti-people. The problem in this policy is in sequencing. When to start and end one part and begin the other is crucial. Unless government gets this policy right, Nigerian importers will shift to Benin Republic or other neighbouring ports with the attendant loss of revenue.

  The automobile industry has collapsed, and to rebuild it, there must be educational integration and intellectual capacity to support it. There must also be infrastructural or raw materials capacity support.  Where, for instance, is the research effort to support the planned industrialisation even as schools are not training the required manpower? Lack of energy, of course, shoots overhead up. 

  Nigeria needs a strategic development agenda to be able to achieve lofty targets. Without putting the right structures in place, the implementation of any policy would only remain a wish.

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