2015 Elections forces Government to delay tariff hike on Tokunboh cars

President Jonathan Goodluck

Political considerations may have compelled the Federal Government to again, postpone the implementation of the 70 per cent tariff on imported used vehicles, as it has again shifted its decision on its enforcement to after the general elections.


The postponement  to April 30, 2015, brings the date-shifting to two times in six months that the tariff implementation date will be shifted, with the first being on July 1, 2014 when government decided to implement the policy in two phases of 35 per cent apiece to January 1, 2015.

Prince Olayiwola Shittu
Prince Olayiwola Shittu

The implementation of the second phase of the 70 per cent tariff would have made Nigerians pay more for imported second-hand vehicles from January 1, 2015, thereby further depleting the dwindling purchasing power of the groaning masses.

Boniface Aniebonam
Boniface Aniebonam

Industry watchers are however praising the decision by the  Government as many noted that the opposition was already waiting to cash in on it, in the vain hope that the backlash of the implementation of the policy would have created a spiralling inflation and a new disequilibrium in the economy;  which would have further alienated President Goodluck Jonathan from the people.

“We knew the Government would effect a postponement. It would have too foolhardy not to do so. The opposition would have moved into the port, sow the seeds of disaffection and watch Jonathan lose votes, as implementation agency and law enforcers battle to restore peace!” a respondent, Anthony Emeordi indicated.

Speaking in the same vein, an agent who spoke on condition of anonymity confirmed it, saying the agents were determined to “look Government in the face”, over its implementation.

“We were waiting for Government to begin implementation; we wanted to make a point; and a good point at that”, he stated, pointing out that the issue would have been used not only to paint Mr. President black, but also as a heartless person, who does not want Nigerians to have access to even tokunboh (second-hand) cars.

He however agreed that it was not that the agents were averse to any policies that would encourage Nigerians to use new cars, only that present approach was considered too hasty, and lacking in Indices that would cushion the masses from a thoughtless implementation.

It would be recalled that the Government  while beating a retreat in July 2014, had stated then that the postponement was to enable local vehicle assembly plants to ramp up production in order to meet the nation’s growing demand for brand new vehicles.

An end of year statement issued by the National Automotive Council  (NAC) said Government  had deferred the implementation of the new tariff to April 30, 2015, due to the delay in the establishment of a vehicle finance scheme.

The Director-General, of NAC Aminu Jalal who noted that Nigeria’s vehicle market was currently about 400,000 units a year, also lamented that about 300,000 consisted of imported second-hand, sometimes not better than mere scraps.

“The arrangements for the establishment of the affordable vehicle finance scheme suffered a delay of about four months due to the Ebola Virus Disease.

“The staff of the collaborating bank, Wesbank of South Africa, delayed their planned trip to Nigeria to set up operations from September 2014 to January 2015. Hence, the new date for the start of operations of the financing scheme is April 2014. Accordingly, the Minister of Finance has been asked to extend the levy deferment on used cars to April 30, 2015.

“The automotive policy has five elements, one of which is market development. Under market development, tariffs are increased on FBU vehicle imports. These tariffs are to be reduced gradually over the years, as the vehicle assembly and local content operations gain momentum.”

“The assembly plants will import two FBU at concessionary duty for every one CKD/SKD they assemble in 2014/15. It will be one to one in 2016/17”, Jalal concluded.