Mixed reactions have continued to trail the ban on the importation of vehicles through the land borders almost four weeks into the implementation of the new policy regime which many have argued is misplaced. Ibrahim Apekhade Yusuf and Ernest Nwokolo in this report examine the contending issues
Some policies of government, however well thought out, are often misconstrued if not rejected outright. This is particularly true of the new policy regime announcing the ban on the importation of vehicles through the nation’s land borders.
Justification of the new policy regime
The last administration had initiated a new automotive policy that raised the duty paid on imported vehicles from 20 percent to 70 percent, covering 35 percent duty and 35 percent levy, effective from 2014.
The policy, aimed at discouraging importation and increase patronage for locally assembled cars, was, however, counterproductive as many Nigerians who could not afford to buy ‘expensive’ locally assembled cars, abandoned the seaports, and started patronising ports in the neighbouring countries of Benin Republic and Togo, where it was far cheaper to import and bring vehicles into the country through the land borders.
In compliance with the new fiscal policy on imported vehicles as directed by the federal government, the Nigeria Customs Service (NCS) has commenced full implementation of the 70 percent tariff on imported vehicles.
Expectedly, this led to attendant revenue losses by many investors and businesses, especially investors that built roll-out, roll-off (RORO) terminals, specialised in handling imported vehicles at seaports, as over 60 percent of cargoes were diverted to neighbouring ports of Cotonou.
Thus to curtail what it considered unwholesome revenue loss and massive unemployment in the sector, the federal government issued a directive to the Customs on December 5, 2016 to prevent the import of vehicles into Nigeria through land borders across the country.
Importers of vehicles through the land borders were requested to utilise the grace period up till 31st December 2016 to clear their vehicle imports that landed in neighbouring ports.
Thankfully, some stakeholders, especially terminal operators under the aegis of the Seaport Terminal Operators of Nigeria (STOAN), saw the new policy as a welcome development.
Princess Vicky Haastrup, chairman of STOAN, said the new policy if well implemented by Customs will reduce the smuggling of vehicles into the country and revive the operations of Roll-on-Roll-off (RORO) terminals that handle all types of vehicles, some of which are at the verge of shutting down since the implementation of the new auto policy took effect.
“We are confident of the ability of Mr. President to turn the economy around. The earlier ban on importation of rice through land borders and now of vehicles is a welcome development. We are happy that the president has listened to our appeal to reverse incongruous policies inherited by his government from the former administration and which have deprived Nigerian ports of cargo,” she said.
Pressed further, the STOAN boss urged the federal government to take a step further and scrap the high import duty regime imposed on vehicles by the administration of President Jonathan in 2013.
“In addition to this, we appeal to Mr. President to return the import duties on vehicles to 20 percent from the prohibitive 70 percent tariff imposed by the former administration. The reversal will serve as an incentive for Nigerians to import legitimately through the seaports and make appropriate payments to government. This will boost revenue collection by the Customs and also lead to the return of lost jobs at the affected ports,” she further stated.
Welter of criticism against the ban
But not a few are happy with this policy. One man who should know better is the president of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Mr. Lucky Amiwero.
He had expressed his misgivings over the policy in a letter to the federal government, in which he urged the government to revisit the ban on importation of vehicles through the nation’s land borders with a view to giving the importers 90 days grace period for importers to clear their trapped vehicles at the various borders.
Amiwero’s letter addressed to President Muhammadu Buhari and copied to the Vice President and 10 others recalled that about 10,000 motor vehicles were held up at various land borders, which according to him were legal entry points in the clearance of goods.
In the letter obtained by The Nation, Amiwero maintained that land boarders were legal entry points recognised as legitimate points by the federal government under the Import Guidelines and the Destination Inspection on agreement for the provision of x-ray scanning equipment as process centre for the collection of import duties and other charges, which included motor vehicles and other goods.
The NCMDLCA boss further observed that the ban stopping importation of vehicles through the land border contravened the World Trade Organisation (WTO) Article X on publication and application of trade regulations.
In the letter, which reads in part, he said: “The provision as contained in the above Convention stipulates that each contracting party shall provide opportunities and an appropriate time period for traders and other interested parties to comment on the proposed introduction or amendment of laws and regulations of general application related to the movement, release, and restriction of transit goods.
“As stipulated in the WTO convention, trade regulations and amendments with regards to restriction and reversal of Fiscal Policy on trade, must be subject to process of consultation by trading public and transparency in the timing, so as to accommodate the challenges that will be associated with the directive/regulation.
“The restriction of vehicles through the land border is with a very short notice, which contravenes the convention and global best practice on reasonable information across the international community, carrier, and shippers, traders etc. that are directly affected by the decision.”
Amiwero further pointed out that most of the states in the north were entirely or almost enclosed by land (landlocked), entailing that they had no shoreline on open sea or fresh water bodies but for only land border approved as legal entry point in the north, which he said would greatly affect trade to the north and eventually effect employment.
While reacting to the ban, Tony Nwabunike, former chairman of Council for the Regulation of Freight Forwarding in Nigeria, (CRFFN), who commended the ban, however, expressed fears that corruption among Customs officers at the border posts of Seme and Idiroko might make it difficult for the policy to thrive and deliver on its objectives.
The ban, according to him, may end up failing as that of rice has continued to fuel smuggling of rice through the land border for the sole benefit of the importer and corrupt Customs officers.
“Let me be honest with you, now that government has banned vehicle import through the borders, it is going to be more business for some of the officers at the borders, now smugglers would no longer pay N1million to the government any more but themselves alone,” he added.
Noting that except Innosons Motors, there has not been any serious car manufacturer in the county, Nwabunike called on the federal government to reduce the tariff on vehicles coming through the ports, to make importation through the seaport very attractive to people.
“It does not make any sense to hold on to high tariff since we have not started producing cars in Nigeria. Government can review the tariff downward and reintroduce that when we start producing to protect the indigenous companies,” he said.
Lawmakers have also added their strident calls for the suspension of the policy. Specifically, the House of Representatives has given a directive to Mr. President to suspend the proposed ban on importation of new and used cars through land borders.
The lawmakers, who described the policy as “too harsh” owing to the fact that it will add to the economic miseries being faced by Nigerians in this time of economic recession, were prompted by the adoption of a motion by Abdulahi Salame (APC, Sokoto), who was of the view that many Nigerians cannot afford locally assembled cars. He stated that the declined value of naira, inflation, unemployment and high cost of living have forced over 80 percent of the population to live below $100 a day.
Taking a cue from the lower chamber, the Senate leadership also called for the reversal of the policy, describing it as anti-poor.
The Senate acted on a motion titled: ‘The ban on the importation of vehicles through the land borders into the country.’
The motion was jointly moved by Senators Barau Jibrin (Kano North), Kabiru Gaya (Kano South), Sabi Abdullahi (Niger North), Shehu Sani (Kaduna Central) and Ali Wakili (Bauchi South).
The lawmakers unanimously rejected the policy and asked the NCS, to immediately suspend its implementation.
The Deputy President of the Senate, Senator Ike Ekweremadu, who presided over the plenary, urged President Muhammadu Buhari to listen to the cries of Nigerians and reverse the policy.
“From the contributions made, it is obvious that the policy is unpopular. We are representatives of the people and the people have spoken through us that they do not want this policy. I think those in government should listen to them,” Ekweremadu said.
The Senate also directed its Committee on Customs and Excise, headed by Senator Hope Uzodinma, to investigate the circumstances that led to the decision of the federal government to place a ban on the importation of vehicles through the land borders.
Customs’ CG’s undying resolve to push through the policy
Despite the welter of criticisms by the National Assembly, the Comptroller General of Customs, Col. Hameed Ibrahim Ali (retd), has reiterated the policy continuity as he urged stakeholders to see the inherent benefits of the policy and cooperate with the NCS as personnel strive to implement the fiscal policy of government. But, how successful the policy will be is yet to be seen.
The Nation gathered that the CG had directed the movement of more officers from the Headquarters Compliance Team and the Federal Operation Units to join the resident officers of land borders to tackle violators.
Echoing similar sentiments in a statement by the acting spokesman of the Service in Abuja, Joseph Attah, it quoted the CG has saying that “Despite Nigeria’s bigger and more equipped port facilities, statistics has shown that more than 90 per cent of vehicles imported to neighbouring countries are normally on transit to Nigerian market.”
It said over 10,000 vehicles are already trapped within 10 days of the policy enforcement. It noted that vehicles properly imported through the land borders between January 2014 and December 2016 was only 209,691 with N38.5billion paid as duty while it seized another 5,998 with duty paid value of N10.2billion.
Same old story
Despite the ban, smuggling activities have not ceased. Investigation by The Nation revealed that some unscrupulous car dealers who use the land borders have become more daring.
Checks by The Nation at Idiroko, a town in Ipokia local government area of Ogun State, situated along the Nigeria-Benin border, showed that most of the towns and villages like Oke Odan, Ajilete, amongst others, were daily besieged by desperate car smugglers who operate from the area.
One of the residents in the area, who spoke with The Nation under anonymity, confided in our correspondent that the recent ban on importation of vehicles through the land borders has worsened.
According to the source, Idiroko is arguably the most notorious of border posts in West Africa because of the nefarious activities perpetrated by daredevil smugglers who flock to the neighbourhood.
“The lands are accessible to any would-be smuggler, the terrain is another advantage to smooth operation because everywhere is road.’’
He said the commands also had out-stations like Ijoun, Ifoyintedo and Ijofin to curtail any smuggling on foot, machines or through the waterways.
Along Ajilete road for instance, Ohunbe, Oke Odan and Ilase are some of the notorious places located where some of these smugglers operate from along the road to Ajilete. “There, they use an improvised kind of vehicle that can carry over 80 bags of rice at once.”
The same scenario played out at Badagry, a coastal town in Lagos State, situated between the city of Lagos, and the border with Benin at Seme. A resident, who simply gave his name as Wensu, confirmed to our correspondent that some of the smugglers with the connivance of unscrupulous customs officials ferry vehicles across rivers on wooden planks.
A day at Abeokuta Customs Command
A visit to the Customs Command Headquarters of Ogun State located at Off Quarry Road, Abeokuta, was an eye-opener of some sorts. A cursory view showed that the environment looked bland just as the premises was unsightly with low and medium range vehicles and articulated trucks parked indiscriminately, apparently seized from smugglers.
The Nation sighted three officers in separate locations, who all seemed engrossed in personal matters, judging by their rather carefree attitude.
Speaking with The Nation, the PRO in the Ogun State Command, Usman Abdulahi, who rose in defence of the Customs, said: “The anti-smuggling unit of the command has been strengthened to monitor/prevent the movement of any banned items from entering the country.”
Pressed further, he recalled that “Recently, more than 10 Tokunbo vehicles were seized from smugglers who attempted to test the resolve of the command in enforcing the fiscal policy of the federal government to the last letter. So, our men are working round the clock and not relenting until smuggling is brought to the barest minimum in the command.”