Stakeholders applaud suspension of auto policy, seek probe of beneficiaries


…We’re yet to be notified – Customs

Stakeholders in the Nigerian maritime sector have applauded the federal government over the suspension of the National Automotive  Industry Development Plan (NAIDP) popularly referred to as auto policy and planned introduction of a new one to replace the suspended policy.

It will be recalled that the Minister of Industry, Trade and Investment, Adeniyi Adebayo disclosed this at the Lagos Chamber of Commerce and Industry (LCCI) 2019 Presidential Policy Dialogue held in Lagos recently.

While speaking at the LCCI event, Adebayo assured that government was already planning to send a fresh auto policy bill to the National Assembly that would contain the inputs and views of auto stakeholders, private sector operators and interests of Nigerians in a bid to achieve inclusive industrialization growth in vehicles manufacturing in Nigeria.

The minister explained that the six-year-old auto policy has failed to achieve the desired outcome for the country’s industrialization bid in vehicle manufacturing and impact positively on businesses of auto manufacturers.

He noted that that President Muhammadu Buhari refused to assent to the recently passed auto policy bill by the 8th National Assembly following pressure from the Orgnized Private Sector (OPS) and auto stakeholders on the implication for the country’s economy, especially since the old auto policy already adversely impacted on the cost of doing business, welfare of the people, government’s revenue and the capacity of the economy to create jobs, including causing massive trade diversion to neighboring countries.

According to him, since he resumed as the country’s Minister for Industry, Trade and Investment, he has been inundated with public outcry, stiff opposition from the OPS for a review of the country’s auto policy since the one instituted by the Jonathan administration in 2013 was long overdue without any meaningful impact on the development of vehicle manufacturing in the country.

Speaking on the development, the National Vice President of the Association of Nigerian Licensed Customs Agents (ANLCA), Dr. Kayode Farinto while describing the suspension as good riddance to bad rubbish, harped on the need for the federal government to investigate those who had actually benefitted from this suspended policy in the last few years as a lot of people had actually benefitted at the expense of Nigeria.

According to him, “People are supposed to bring in, being local assemblers, have they really assembled? What they have been bringing in is semi built vehicles, just remove the tyres and the steering and they just take them to their warehouses and they becomes vehicles without those things assembled or manufactured in Nigeria. A lot of people have actually been making money through this and we have actually clamoured that government should look into it and if government is saying that it is suspending it now, government needs to set up Presidential investigative committee to unveil who the beneficiaries are, how much government lost in this area.”

On the way forward, he pointed out that the federal government should begin with a policy to encourage local manufacture of spare parts like radiator, engine oil, break pad, rotor and so on and gradually graduate to vehicle manufacturing rather than a policy to encourage auto manufacturing stating that that was how China started.

“Secondly, government should encourage those bringing in new vehicles not harping on revenue that government is interested in. The newer your vehicles, the lower your rate of duty or the lesser the value you are paying. This will now encourage the importers of the vehicles, instead of them buying junks or accidented, they will buy the newer vehicles.

“Another issue is that we are suspending the auto policy replacing it with what? The government itself is confused; the customs that will implement it is also confused. The only thing the customs will do is that when you come forward to pay your duty, they will not stop you from paying your duty based on old auto policy because there is no new one that is replacing the old one and those that have had their Form M opened in the last three month will still be declaring their consignments. That is why we say you need stakeholders’ input to be able to drive most of these policies. There is confusion in the air.

Recently, the CGC rolled out a circular telling us that anybody who has his vehicle seized at FOU should go and pay duty and penalty levy to collect his vehicle. Is it replacing the auto policy? So, that means we are in a period of interregnum now because the customs have not adjusted the rate of duty as well as levy, everything is rolling the way it has been”, he said.

On his part, the founder of the National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Boniface Aniebonam described the suspension of the auto policy as a welcomed development even as he recalled that NAGAFF had for a long time believed that the policy was not working as one could see the level of smuggling activities as a result of the policy.

“If they have suspended the policy, that is quite good, for instance the National Automotive Council (NAC) levy which of course, for so long we have paid, what have we done with the money? Money derived from such should have been utilized in the area of granting some kind of leverage to those who are involved in auto manufacturing. We cannot continue to import vehicles in our country, we should be able to manufacture by now.

“The auto policy vis-à-vis the NAC as I said earlier, we have all seen the Peugeot Automobile, Toyota, even the accessories company like the Dunlop and Michelin providing those needed materials for vehicle manufacturing to thrive, they have all left Nigeria. But I think that what the government needs to do is to engage stakeholders to take opinion from them before they would come out with policy that will go.

“For me, we have advocated severally, since we don’t manufacture all these vehicles, we need to do something in a manner that will create a level of choice for people. The older a vehicle is, the higher the rate of duty and the newer the vehicle is, the lower the rate of duty. The implication is very obvious. One, people have choice to make, two, you must not forget that these old vehicles coming to this country, we still have to buy the spare parts from oversees to repair them. So, we are spending so much money and if we give incentives for new vehicles to come in, then it saves us a lot of money in terms of foreign exchange to import the spare parts.

“And then the rate of duty on customs related matters, we need to come down and that will curb the level of smuggling activities. The more you make things too difficult, the more people become more daring. You heard the Comptroller General of Customs again saying that when they shut the borders, that has reduced smuggling activities to the barest minimum and again, we cannot continue to close down our borders because that might be in breach of protocols within ECOWAS treatise. It is quite a right step in the right direction; I hope they will get it right this time around”, he said.

On whether the customs should suspend the current duty and levy payable on imported vehicles pending the formulation of a new auto policy, Aniebonam who is also the National Chairman of the New Nigeria People’s Party (NNPP) said, “The customs is there, they will continue to do their job, the extant laws there in terms of rate of duty on vehicles. The revenue due to government will continue to come in until they come up with a new policy. And then those who are into manufacturing, they will also as fast as possible look at the level of incentives they could create like Innoson motors, they should invite them to know what is their problem. The whole thing is to create local capacity so that we can generate employment for these young Nigerians.”

Responding, the Public Relations Officer of the Tincan Island Command of the Nigeria Customs Service (NCS), Mr. Uche Ejesieme believed that an officer of the caliber of the Minister of Industry, Trade and Investment cannot just come to the public to say certain things without having an empirical justification adding that in the context of that presentation, that the Honourable Minister must have gotten some kind of privileged information which some of them in the service may not have.

“However, at the command level, we are yet to get any circular to that effect and once we don’t have any official circular to that effect, for now, we are still maintaining status quo ante. But it can’t just be a statement made for sake of making comments. I want to believe that government is working towards consulting with relevant stakeholders and key people to see what they can do to better the lives of our people.

“The old rate of duty is still in place because for brand new vehicles 35% duty and 35% levy. For fairly used vehicles 35% duty but if you are part of the auto manufacturers or assemblers, the government has given concessions to them, theirs is for 20% and they also don’t pay levy and this is aimed at ensuring that government supports the auto industry because they have seen very clearly that it is an area that has not been taken full advantage of because of its potentials of creating jobs and for other economic reasons”, he explained.

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