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Customs Service, Other Agencies Synergise To End Vehicle Smuggling

By David Ogah
10 May 2015   |   7:34 am
The cost of new and fairly used vehicles is expected to rise with the imposition of 75 per cent tariff on imported vehicles.
Comptroller General, Nigeria Customs Service, Abdullahi Dikko Inde

Comptroller General, Nigeria Customs Service, Abdullahi Dikko Inde

WHEN Nigeria’s new automobile policy, intended to encourage the emergence of a vibrant auto industry, was announced last year, the opposition from some segments was fierce, but understandable. The cost of new and fairly used vehicles will go up with the imposition of 75 per cent tariff on imported vehicles.

A section of the auto industry was even more skeptical of the policy, as they pointed out several inadequacies that would make the policy a failure in the long run. They did not like the planned speed of implementation by the government, and they expressed reservation at the hasty implementation due to inadequate power supply, lack of skilled workers to drive the policy, poor economic environment in the escalation of vehicle prices, lack of steel and parts manufacturers.
The policy was designed to attract Direct Foreign Investors (FDI) and to revive comatose automobile plants, encourage transfer of technology and to advance manufacturing activities needed for the production of affordable vehicles for the average buyer in the country.

Despite the reservations, government took another step forward in its implementation, last week, with the introduction of National Automotive Repository Portal (NARP), which is designed to integrate all stakeholders and to ensure the emergence of National automotive database that will serve as a reference for investors, maritime workers and internal Board of Revenue. The agencies, the Customs, NAC and licensing offices have agreed to work together to ensure that no smuggled vehicle is registered anywhere in the country. Therefore part of the agreement involves the collation of all vehicles cleared by the customs at the gateways, including land borders with their identification numbers and to be forwarded to NAC, which will in turn forward same to all licensing offices nation wide, with its stamp, to ensure only the vehicles on the list are registered.

With the scheme, it will become impossible for any smuggled vehicle to ply Nigerian roads as they cannot be registered anywhere in the country.

Under the scheme, all vehicles are to be issued with a vehicle Identification Number (VIN) by the Nigeria Customs service, which it will then transmit to the National Automative Council (NAC) and later to the licensing officers nationwide. Any vehicle not on the list from NAC and has no VIN will not be registered anywhere in the country.

Trade and investment minister, Olusegun Aganga said in Abuja last week that a functional database for vehicles in the country was critical for the success of National Industrial Revolution Plan (NIRP). Besides he said it was important for industrial growth and development.

According to him, the NARP would help to bring back the automobile products being diverted to ports in neighbouring countries as “as all vehicles entering Nigeria will not be registered if their Vehicle Identification Number (VIN) is not in the repository.

Defending the move to have all vehicles in the database for ease of registration at the licensing offices, the minister said: “The automotive policy was launched as part of Nigeria’s industrial revolution plan, aimed at increasing the contribution to our GDP by the manufacturing sector from 6.8 per cent in 2014 to above 13 per cent by 2017. The main objective of the automotive policy is to bring back automotive assemble and develop local content. This will enable us create employment, acquire technology for our industrialization and reduce pressure on the country’s balance of payment position resulting from escalating vehicle import bill. I am accordingly, very pleased to inaugurate the National Automobile Repository portal, which will help maritime workers to prevent diversion of automobile to other ports as all vehicles entering Nigeria will not be registered if their VIN is not in the repository.”

The Director General of National Automotive council, Aminu Jalal, said the NARP scheme would “help government agencies to keep an update of data of vehicles. It will support data exchange among government agencies because it will assist them to have accurate database information of VIN”.

The chairman of the automobile and allied products Trade group of the Lagos Chamber of Commerce and Industry (LCCI), Mr Oseme Oigiagbe said the Vehicle Identification Number scheme by NAC ought not to be used to check smuggling of foreign products, especially fairly used vehicles.

“I am speaking from the professional point of view. The Vehicle Identification Number (VIN) has nothing to do with smuggling. It is to harmonise the situation where licences of vehicles are done in a way to recognize the origin of vehicles, their stock, colour and for issues relating to warrantee to be traced. It is to have a structure where harmonized numbers are allocated to products from assembly plants. To check smuggling, you need to police the border, you need differential tariff and put in place institutional structure in governance.

He defended the high tariff on imported vehicles, saying: “nowhere in the world are you going to encourage local, assembly that there will be no differential tariff in existence to discourage import and to ensure that local, assembled products have better price and are competitive. The essence of assembly plant is not only to produce, but also to generate employment.”
According to the chairman of the sectoral LCCI, there was need to establish an industrial park where component of vehicles could be produced to feed the assembly plant.

“There are about 2,800 components in a car. So you need to encourage the production of local content materials. There is need for industrial clusters or park to be assigned the production of certain components to feed the assembly plants, because we need to move from the position of comparative advantage to competitive advantage,” he said.

The National President of Association of Customs Licensed Agents (ANALCA) Prince Olayiwola Shitu said the VIN scheme as proposed would breed corruption because officials of the licensing offices will take advantage of it to make more money for themselves. He therefore urged the National Automotive Council to concern itself with how Nigerians will have access to cheap, made in Nigeria vehicles.

He said the scheme could be a ploy for new tariff collection from importers by the government, adding, “Such attempt will be resisted by importers”

“If for anything, the National Automotive Council is introducing backyard way of collecting money, we will resist it and we will close down the ports. What has NAC got to do with Vehicle Identification Number; they should allow the Federal Road Safety commission to do their work. They should look for how Nigerians will get new vehicles from the local automotive companies. They are not to discourage smuggling. They are only just trying to enrich workers at various licensing offices; they are trying to breed corruption, which the president-elect promised to fight. What I expect them to do now is to empower companies to manufacture more vehicles,” he said.