Just when the worst seems to have been seen or heard of sloppiness in the running of the nation’s affairs, Nigeria has a way of outdoing herself. The inconsistency and policy somersaults that have become the hallmarks of governance in Nigeria got another devastating advertisement when Customs authorities surreptitiously began implementation of the new tariff regime, which raised the duty and levy on imported new and used cars from 20% to 70%; after the government had earlier suspended them. Even though second-hand vehicles are excluded at the moment, the vexatious tariff amounted to putting the cart before the horse, because such prohibitive tariffs ought to be imposed only after local car manufacturers had begun rolling out new vehicles. Consumers are then left with a choice between affordable locally produced cars and high-duty imported vehicles. Honestly, Nigerians do not deserve a policy designed to further impoverish them, and government officials ought to know better. More so, as Jonathan himself had assured that implementation of the policy would not inflict pains on Nigerians.
Nigerian Customs authorities had earlier confirmed the suspension of the tariff, but later recanted and began collecting it without notice to clearing agents and freight forwarders. They claimed to be acting on instructions from the Minister of Finance, who has neither confirmed nor deny issuing the directive. But if past initiatives, and especially the conflicting policy signals from this government were anything to go by, the higher tariffs, which by all indication, increases the cost of doing business, will inevitably encourage smuggling of vehicles from neighboring countries, that at present, are the major beneficiaries of Nigeria’s misguided import policies. This obviously is not the intention of the government. Given the current lack of a viable alternative to imported cars, the implementation of the new tariff as it affects imported vehicles is hasty at best, and should be shelved in the national interest.
Undoubtedly, the new automotive policy is a lofty strategic development agenda, most desirable for a country, which spends over three billion dollars annually on vehicle importation with adverse effect on foreign exchange. But raising the duty on imported cars should be contingent on first rolling out Made in Nigeria cars in substantial numbers from the reactivated plants or new ones set up for the purpose. That the authorities acted in bad faith, raises fundamental questions about the President’s own judgment and character, and cast doubts over the government’s real intentions. Is it to exploit hapless Nigerians or is it about building local car manufacturing capacity in the largest market in Africa and one of the top 10 fastest growing markets in the world?
Under the new policy, government raised import levies on new and used cars from 20% to 70%, making cars unaffordable to the average Nigerian. Expectedly, stakeholders are protesting not just the new tariff, but the cavalier manner in which it is being implemented. The National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), warned that the new policy would increase the hardship faced by Nigerians. Also, the association of clearing agents and freight forwarders withdrew their services at the ports and decried the back-door implementation of the new tariff. The new tariff should therefore be put on hold until all the necessary groundwork is done to save Nigerians the hardship that its implementation is inflicting. They government cannot be so insensitive to the plight of the citizens.
Despite concerns voiced by stakeholders, on the negative impact on the economy, the government has not heeded expert advice. What is even sadder and unbearable is the absence of any commensurate investment in the transport sector. Announcing the new National Automotive Policy (NAP), Trade and Investment Minister, Olusegun Aganga appropriately articulated the essence of the NAP to include the possibilities of fast-tracking inclusive economic growth, market development, skills acquisition and backward integration. But with other germane issues like erratic power supply and high overhead costs to confront, would the new car plants sustain long-term production to make the new policy work? Which component of the vehicles to be assembled in Nigeria will be locally sourced? Where are the roads to support the mass movement of people, even where the vehicles become available?
Certainly a lot still needs to be done to make the dream of local car production a reality. The level of socio-economic and infrastructural development is abysmal. It is a sad commentary that the symbolic roll-out of the first product from a Nissan line in April last year was celebrated to impress critics. There has since been little proof of a continuous process. Many other assembly plants are still being wooed with incentives to key into the government’s vision. Considering his position, Aganga is adequately informed about developments in the auto industry. So, the question is: what informs his optimism?
The new tariff regime is devoid of any link to any development plan. In the 1970s and 1980s, the policy of government was anchored on development plans, but the Jonathan administration has saddled itself with slogans rather than well thought-out development plans. Nigeria has an expected level it desires to attain but has there been any process deliberately followed and actions taken to drive our economic outcomes to that level? Are other sub-sectors tied to the auto industry fitted in the national plan? Or is it the case that a sub-sector is isolated as a national agenda? There must be a target for the country at any point in time. That is the reason for national planning. Government’s policies must be interpreted into other sectors –even as obnoxious policies and prebendal privileges fostered by corruption have turned statutory and essential government activities into strenuous tasks, as the nation wallows as a typically consumerist economy.
Except something is done to redress this anomaly, the new automotive policy can be deemed to have fallen prey to greed and avarice. The deafening silence of Finance Ministry officials over the actions of the Customs authorities seems to suggest that the Ministry is hamstrung by nondescript affinities with the Customs department, to clarify the dispiriting tariff regime. Whether deliberate or accidental, the new tariff is an exploitation of Nigerians. Government’s insensitivity and wanton abuse of the citizens has exposed the nation to all manner of abuse by all manner of people. But this must not be taken lying down. The silence of the Finance Ministry in the face of the clandestine operationalization of the new tariff regime suggest to discerning Nigerians that there is an unethical relationship that deflates the moral authority of the government to take pro-active measures to administratively address the situation despite the widespread complaints of stakeholders . If the government cannot protect the people, Nigerians should protect themselves. They should, therefore, embark on class action to express their grievances. Without prejudice to an increased push for manufacturing of cars locally, government has a duty to reconsider its position on higher tariffs for imported cars.
