The Nigerian government is considering a ban on the importation of used vehicles that are more than 20 years old, according to the National Automotive Design and Development Council (NADDC). The move is aimed at promoting the local production and assembly of vehicles, as well as reducing the environmental impact of old and polluting cars. However, the proposal has met with mixed reactions from various stakeholders in the auto industry, who have different views on its benefits and drawbacks.
The NADDC, which is the agency responsible for implementing the National Automotive Industry Development Plan (NAIDP), has stated that the ban on used vehicles import is necessary to protect the local auto industry from unfair competition and to encourage investment in the sector. The agency also claims that the ban will help to reduce the emission of greenhouse gases and improve the safety of road users, as older vehicles are more prone to accidents and breakdowns.
According to the NADDC, Nigeria imports about 400,000 used vehicles annually, which account for 90 per cent of the total vehicle imports in the country. Most of these vehicles are over 15 years old and have high fuel consumption and emission rates. The agency argues that these vehicles are not only detrimental to the environment, but also to the economy, as they drain the foreign exchange reserves and create a dependency on imported spare parts.
The NADDC believes that the ban on used vehicles import will create a demand for locally produced and assembled vehicles, which will in turn stimulate the growth of the auto industry and create employment opportunities. The agency also hopes that the ban will encourage the development of a vehicle financing scheme, which will make new vehicles more affordable and accessible to Nigerians.
The opposition to the ban
However, not everyone agrees with the NADDC’s proposal. Some stakeholders in the auto industry, especially the importers and dealers of used vehicles, have expressed their concerns and reservations about the ban. They argue that the ban will have negative consequences for the consumers, the economy, and the industry.
The importers and dealers of used vehicles, who are represented by the Association of Motor Dealers of Nigeria (AMDON) and the Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA), have stated that the ban will create an imbalance in the domestic market and deprive the consumers of their right to choose. They contend that the ban will create a monopoly for the local manufacturers and assemblers, who will charge exorbitant prices for their products and services. They also claim that the ban will reduce the revenue generated from the import duty and other taxes on used vehicles, which will affect the government’s budget and development projects.
The importers and dealers of used vehicles have also questioned the capacity and quality of the local auto industry, which they say is still in its infancy and cannot meet the demand and expectations of the consumers. They point out that the local auto industry lacks the infrastructure, technology, and skilled manpower to produce and assemble vehicles that are comparable to the imported ones in terms of performance, durability, and safety. They also doubt the availability and affordability of the spare parts and after-sales services for the locally produced and assembled vehicles.
The importers and dealers of used vehicles have therefore urged the government to reconsider the ban and adopt a more gradual and inclusive approach to the development of the auto industry. They have suggested that the government should instead impose stricter regulations and standards on the importation of used vehicles, such as limiting the age, emission, and safety requirements. They have also proposed that the government should provide incentives and support to the local auto industry, such as tax waivers, subsidies, and loans, to enable them to improve their capacity and quality.
The global trend and the way forward
The issue of used vehicles import is not unique to Nigeria, as many countries around the world have faced similar challenges and adopted different measures to address them. Some countries, such as Egypt, Morocco, South Africa, Sudan, Nepal, Sri Lanka, and Bhutan, have banned the importation of used vehicles altogether, while others, such as Kenya, Uganda, Bangladesh, and Mauritius, have imposed age restrictions and tax levies on them. Some countries, such as India, have also increased the customs duty on imported vehicles, especially electric vehicles, to promote local manufacturing and assembly.
The global trend shows that there is a need for a balance between the protection of the local auto industry and the satisfaction of the consumer demand. The ban on used vehicles import may have some advantages, but it may also have some drawbacks. The government and the stakeholders in the auto industry should therefore engage in a constructive dialogue and consultation to find a mutually beneficial and sustainable solution. The government should also ensure that the local auto industry is adequately prepared and supported to meet the challenges and opportunities that the ban may bring.
