Confusion over customs’ clampdown on auto dealers
• $8 billion market threatened
• Anxiety over prices of vehicles
The nation’s automobile industry is currently in the grip of confusion as the Nigeria Customs Service (NCS) begins a major clampdown on car dealers in search of smuggled vehicles. The NCS has begun the clampdown on car marts across the country, particularly in Lagos, Katsina, Kaduna and Sokoto states.
Some of the dealers, who spoke with The Guardian were worried that their businesses had been halted for some days, without any hope in sight, claiming that the customs was not ready to listen to them as they were only advised to wait for further directive from the headquarters.
They are alarmed that the nation’s $8 billion automobile industry is being seriously threatened by the action of the NCS. They are afraid of possible rise in the prices of automobiles in the domestic market. The Guardian’s investigations revealed that many car dealers around Ikeja, Obanikoro, Surulere, Iyana Ipaja, Mile Two, and Igando, all in Lagos; and Sango, Ota, and Ibafo in Ogun State, among others, have moved their vehicles away from their marts in fear of possible raid by the customs. A few courageous dealers are taking advantage of the situation to hike prices as competition shrinks.
The Spokesman of the NCS, Joseph Attah, a deputy comptroller, told The Guardian that the move against smuggled vehicles was a nationwide action. He said the agency had the right to shut the premises of anyone found to be dealing in smuggled goods, as stipulated in the law guiding its operations.
“The customs is performing its official duty, and that is the action we are taking across the country now. The management will review the situation and take appropriate action before weekend, and I will duly communicate that. When we sort the vehicles, we will release the ones that have duty,” Attah said.
The Federal Government had banned the importation of vehicles through land borders and slammed a 70 per cent duty on those imported through the seaports.
Smuggling, grey import of second-hand vehicles, and lack of reliable data make the exact size of Nigeria’s vehicle market and fleet difficult to determine, even as Vice President Yemi Osinbajo had earlier estimated that Nigerians spent about $8 billion yearly on the importation of vehicles.
“About $8 billion goes to overseas for the importation of vehicles while Nigerians are suffering. Also, most of the used vehicles imported are unsafe and not good for the citizens,” he said.The Export.gov, in a statistical report released in August 2019, estimated the total market size of Nigeria’s automobile industry at $1.32 billion in 2019.
According to the report, the market size grew from $686.7 million in 2016, to 867.7 million in 2018, and further to $1 billion in 2018, and $1.32 billion in 2019. While local production is valued at $200 million in 2019, total import is estimated at $1.1 billion.
The country’s current vehicle size is estimated to be 11.7 million, but due to insufficient domestic production, Nigeria is highly dependent on imports to meet local demand.Anxiety now grips automobile dealers across the country not only due to the clampdown by customs officers, but the planned review of the nation’s auto policy by the Federal Government as well as the overhaul of the sector to boost revenue generation.
In Sokoto, vehicle dealers such as KB Lamah Motors, Royalarms International Motors Limited, 2020 Motors, MD Parking Space , and Urgent Motors Nigeria Limited, already have their marts sealed off. In Lagos, Globe Motors and Ineh Mic, Stallion Motors, Affordable Cars Limited, Carlink Limited, InehmicAutos, Globe Motors, COSCHARIS and Skymit Motors, Arrowhead Motors, Wonder Wheels Motors and Auto Point Motors were affected, while more than 20 car marts have been shut down in Katsina and other places.
The seal, sighted by The Guardian, reads: “The official seal is by Nigeria Customs Service, Headquarters Strike Force. Unauthorised removal of this seal attracts a fine of N100 million or 10 years imprisonment or both.”Other vehicle dealers across the country expressed the fear that they might be affected too.
The Managing Director, Fumba Resources Limited, Olubunmi Ajayi, who said his company did not deal in smuggled vehicles, wondered why the customs would seal off his premises for doing a legitimate business.“We closed on Monday, only for us to come back and found that customs officials have sealed off the car garages. They came about two months ago and asked us to bring the clearing papers, which we made available. Now, they did not give any notice. They just came over the night like a thief and sealed off the car marts. This is cruel, barbaric and satanic.
“We don’t have smuggled vehicles at all. They were all cleared through the ports of Lagos. There are many ways they can discover a smuggled vehicle. You can come to the garage with your machine, input the chassis number of the vehicles, then you will know instantly if there is a smuggled vehicle there or not.
“Besides, they ought to have given people an advance notice and given them a window to go and pay up, after which they can now seal off the marts. The place has been shut down now. We don’t know whom to talk to. We have been to FOU in Ikeja, they said it was a continuous exercise and they didn’t know when it would be opened. This is disheartening. In that place, the local government people will come and disturb you, environmental officers will come, police, and even touts will come and disturb you for doing a legitimate business. Why are we doing this to ourselves in this country?”
The President of the United Berger Motor Dealers Association, in Lagos, Metche Nadiekwe, said it would be unfair for the customs to seal the businesses of car dealers who operated legitimately and paid duties on imported vehicles.
“We pay duties here and I think it will sound abnormal for the customs to come and seal off our marts. We don’t allow anyone here to deal in smuggled vehicles and we have no reason to fear.”
A former chairman of the Task Force on the Reform of Nigeria Customs Service (RPTFCR), Lucky Amiwero, told The Guardian yesterday that the NCS’ action was legal and backed by law, “but they have to exercise some decorum in enforcing it, so as not to jeopadise businesses in the economy.”
“ The customs action falls within the law, but procedurally the action is not good because they are trying to kill businesses. When a consignment has come into national consumption, you don’t treat it as a border consignment. Once it has passed through the border, what you will do is to use intelligent network and not to seal off the place. There must be some decorum in their action, because it would discourage foreigners from coming into the country to do business,” he added.
Amiwero, who is also the President, the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), further said: “Most of those laws are archaic and need to be refined. A lot of things have changed in the world and we need to move along. What they (customs) are looking for is revenue, so they can easily get that through intelligent network. When you begin to lock their car marts and harass them, people will not be encouraged to come into the country, and that is not good.”
Meanwhile, the NCS has disclosed that in the last few days, it arrested 146 illegal migrants and seized 18,759 bags of foreign rice along the borders.The customs, which said some of the illegal migrants were coming into the country to engage in criminal activities such as armed banditry and kidnapping, lamented that one of them was caught with a pistol.
Attah disclosed these during a sensitization programme for rice farmers and other stakeholders in Kaduna yesterday. The customs spokesman maintained that the partial border closure was aimed at ensuring that dangerous items don’t find their way into the country, and not an action taken to create hardship for Nigerians.