Vehicle ban importation will increase smuggling, port congestion –Experts

Financial analysts on Saturday faulted the ban on importation of vehicles through the land borders saying that the new policy may increase the level of smuggling of the product into the country.

They noted that the move was a good policy that would help to develop the capacity of the local auto industry, but expressed the fears that its implementation, if not effectively done, would defeat such motive owing to port congestions.

Those that spoke on the issue are the President, Abuja Chamber of Commerce and Industry, Mr Tony Ejinkeonye; former Managing Director, Unity Bank Plc, Mr. Rislanudeen Mohammed and the Head, Banking and Finance Department, Nasarawa State University, Keffi, Uche Uwaleke .

Mohammed told SUNDAY PUNCH in a telephone interview that the ban on vehicle import would definitely affect customs revenue since import duties from cars usually account for the highest revenue items from customs.

He said, “Over the years, car importation through land borders became more cost effective due to large inefficiency and corruption that has been endemic in our seaports.

“Nigeria was denied import duty on most of those goods that came in through the land borders en-route the port of Cotonou in Benin Republic.

“If our ports remain inefficient and corrupt, the implication is that illegal importation would thrive and cost of particularly used cars that are largely used by middle class would go up beyond their reach.”

In his comments, Uwaleke said while the ban would affect government revenue from customs, it would help develop the capacity of the local auto industry.

Uwaleke, an Associate Professor in Finance said, “If the reason for the ban on importation of vehicles through land borders is to check the influx of used vehicles into the country, I think this can also be achieved by putting in place, appropriate measures at the land borders without necessarily resorting to an outright ban.

“This policy will lead to more ports congestion, increase smuggling activities and reduce the number of imported vehicles.

“Given the role of used cars in moderating transport costs in Nigeria, the ban will increase the prices of used cars and raise transport costs in an economy already battling with inflationary pressure occasioned in part by high transport costs.”

In his own submissions, Ejinkeonye said the chamber was not in support of the policy as it would provide room for smuggling and loss of revenue to government.

He said, “For us at the chamber we are not in support of the policy because that is not the solution to the problem.

“Government is trying to realign and capture all the vehicle revenue coming into the country, but that is not the best way to go about it.

“The government should strengthen the capacity of Customs to protect the borders effectively. This will help to ensure that revenue accruing to government through that area is captured.

“So we are not in support of the policy because it would increase the level of smuggling that we are currently battling with.

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