Due to the instability and volatility of foreign exchange in the country, several foreign-used vehicles imported into the country have been abandoned at vehicle terminals in Tin-Can Island Ports Complex, Apapa, LEADERSHIP can report.
Aside from abandonment, vehicle Importation has gone down drastically due to the same forex instability and volatility.
It was gathered that the abandonment was as a result of the increase in exchange rate for Customs clearance by the Central Bank of Nigeria (CBN).
LEADERSHIP reports that since the start of the administration of President Bola Tinubu, the CBN has increased the exchange rate for cargo clearance seven times:
on June 24, 2023, CBN adjusted the exchange rate from N422.30/$ to N589/$; on July 6, 2023, it was adjusted to N770.88/$; on November 14, 2023, it was adjusted to N783.174/$; in December it was adjusted to N951.941/$; on February 2, it was moved to N1, 356.883/$; on February 3, it was raised to N1, 413.62/$ and on Friday, February 9, 2024, it was raised to N1,417.635/$.
Clearing agents told our correspondent that, at present, it cost N20 million to clear a 2022 Lexus RX 350 model from the seaport and N3.4 million for a 2006 Toyota Corolla.
According to the public relations officer, PTML command of the Association of Nigerian Licenced Customs Agents (ANLCA), Ayo Sulaiman, from June 2023 till now, vehicle clearance cost has gone up by over 120 percent, thereby affecting importers’ forecast.
Sulaiman, however, said vehicle importation into the country has gone down drastically while importers are currently abandoning them over clearance costs.
“We can all testify that from December 2023, vehicle Importation dropped by 50 percent, and currently it has dropped to 30 percent and that’s why the Customs Service is trying to give incentives on values and duty on imported vehicles. So, for the service to go the extra mile, it showed that there is a problem.
“Also, if you enter some terminals, it’s like a football field; go to Grimaldi, a five-star terminal, it’s something everyone can see, it’s not hidden: importation through the seaports has gone down drastically. The incentive is work in progress; they want to encourage vehicle importers because if people don’t come up to pick their vehicles, the owners and Customs will lose even when it’s eventually auctioned; it’s not in the best interest of the importers, so Customs wants to give importers the right of first refusal by giving incentives. That’s to show you things are not well with importation of vehicles at the port,” he stated.
Explaining why importers are abandoning their vehicles at the seaports, Sulaiman, said that exchange rate volatility had ruined their forecast.
“Importers are currently abandoning their vehicles because when an importer imports one or two vehicles in December with the hope of clearing at N951/$, only for the vessel to berth and the exchange rate for clearance has been adjusted to N1,417/ $1, how will such person get the fund to cover the huge disparity?
“And, if such a huge disparity is factored into the vehicle, how much will they sell such a vehicle after clearance?” he asked.
“Some people discovered that the duty and terminal charges are more than the value of the vehicles, then they will abandon it in the port,” he pointed out.
Sulaiman further disclosed that because Nigerians cannot afford imported used vehicles, they now go for Nigerian-used vehicles.
“Currently in Nigeria, the auto industry is not for the middle-class again and Nigerians now go into third-party purchases. These are people getting Corolla, Camry of whatever year before, now they are finding it difficult to buy, but buying Nigerian-used because that’s what their capacity can do; it’s about purchasing power.”
According to him, from December 2023, there has been over 30 percent increment in Customs exchange rate for cargo clearance and clearing agents get calculation for duty payment through the ex-factory price and the dollar exchange rate.
“Now, from N951.941 in December to N1,417 today, we can all see the fluctuation and this is affecting the market. In June 2023, with N1.2 million, a 2012 Toyota Corolla can be cleared from the port, but now it’s being cleared with N3.4 million, all isn’t well with Importation of vehicles,” he stated.
The general secretary, Tin Can Island Chapter of the Association of Nigerian Licenced Customs Agents (ANLCA), Barr. Mike Ovien, corroborated that vehicle importation had dropped due to foreign exchange volatility.
“Before the president (Bola Ahmed Tinubu) took over (in May 2023), importation had dropped and that was due to the standard of operations introduced and the foreign exchange volatility; and now the exchange rate has gone far higher, to N1417/$1.
“Importation has dropped because the duty is high for importers to pay. If you are paying over N20 million to clear a 2022 model of RX 350, then it’s not an easy venture and when you are bringing in 10 vehicles before, you will reduce it to two. Importation has reduced drastically due to the CBN exchange rate,” he said.
Corroborating Sulaiman, Barr. Ovien said importers are abandoning vehicles because of the exchange rate differential.
“Why won’t importers abandon their vehicles in the port? You budgeted a certain amount to clear your vehicle from the port only to be told that the exchange rate has increased, and it’s not a small amount as it runs into several millions of naira; so tell me which bank will invest in an importer bringing in a vehicle with this unstable exchange rate?
“If I can’t get the imported used car, I should be able to make do with a locally used one. They are also okay if their parts are available in the market because bringing in Tokunbo is on the high side,” Ovien stated.
US To Lift Entry Ban On Vessels From Nigerian Ports
The United States Coast Guard (USCG) has offered Nigeria a three-year plan to work with the Nigerian Maritime Administration and Safety Agency (NIMASA) for the removal of the Condition of Entry (CoE) placed on American-bound vessels from Nigeria.
Cdr. Juliet Hudson at the USCG headquarters in Washington DC disclosed this during a peer review visit by a delegation from NIMASA.
Hudson announced a bi-annual assessment of compliance level with International Ships and Ports Security (ISPS) implementation at Nigerian Ports working with NIMASA.
“We will work with NIMASA to review the compliance level of ports in Nigeria with the provisions of the ISPS Code. This will be done twice a year to enable us to update the Port Advisory Security Portal in the White House after which a decision will be taken to completely lift the Condition of Entry. We commend NIMASA for ISPS implementation and please deliver this award to your DG,” Hodson stated
Meanwhile, the director-general of NIMASA, Dr. Bashir Jamoh, on Friday hosted USCG advisor, Lt. Benjamin Montz, who led a delegation to NIMASA. Jamoh stated that the agency would continue to prioritise safety and security on the Nigerian waters ways in order to realise the mandate of the Blue Economy.
While acknowledging the support from the American government in seeing to the implementation of ISPC in Nigeria, the NIMASA DG noted that any support to Nigeria should be extended to other countries in the Gulf of Guinea.
He said that Nigeria plays a vital role in the Gulf of Guinea (GoG), hence he called on the USCG to extend support to countries in the GoG region in order to consolidate the gains of the Deep Blue Project in the region, whilst also bolstering the existing ties in the region.
“Nigeria is a major stakeholder in the Gulf of Guinea; you will agree with me that most of the activities in the region revolves around Nigeria.
“We acknowledge the support you have been giving us; we request that you extend it to other countries in the GoG, as a chain is only as strong as its weakest link, and all credit goes to the United States Government,” Jamoh said.
Speaking further, the NIMASA helmsman called on the USCG to assist in the area of training the Agency’s personnel, noting that a gap analysis will be done, and then synchronise with the USCG in order to give the right training to the right personnel.
Earlier in his remarks, the leader of the delegation from the USCG, Lt. Benjamin Montz noted that they were in Nigeria as part of their plans to support the Agency in the area of training, while also collaborating with Agency to improve safety and security in the country’s maritime sector, with particular reference to port operations in Nigeria.
LEADERSHIP reports that NIMASA is the designated authority responsible for the implementation of the International Ships and Ports Security (ISPS) facility code in Nigeria. Over the years, the Agency has continued to collaborate with relevant stakeholders to achieve its mandate, with the United States Coast Guard providing the required support and assistance towards the realisation of safer and more secured waterways in Nigeria, and by extension the Gulf of Guinea.