Rarely 24 hours after the commencement of its new policy on import of vehicles into the country, the federal government yesterday reversed itself.
The government slashed down the auto import duty to 35 percent as against the 70 percent contained in its Automotive Policy, which took effect on Tuesday, July 1.
Minister of Industry, Trade and Investment, Olusegun Aganga, while briefing newsmen at the end of the Federal Executive Council (FEC) meeting, said: “I briefed Council today on one of the misleading articles on one of the newspapers yesterday on the auto policy. And we thought it necessary to make sure the misunderstanding is properly understood and cleared with the Nigerian public.
“The article had claimed that the duty on the used cars is now 70 percent from yesterday (Tuesday); that is incorrect. It is 35 percent.
It also claimed all used cars now coming into the country would pay duty of 70 percent; that again is incorrect.
“For all those in the auto policy programme, all those assembled cars in the programme, the policy is that they would be able to import cars to meet the gap when you look at production and the demands in the country. They would be able to import those cars at 35 percent, so it is not 70 percent,” he said.
Aganga said further that: “It is only for those who are putting strain on our foreign reserves who have no intention to create jobs who want to continue to remain traders that the 70 percent applies to, and this is to discourage trading. It is to encourage local assembly and job creation, and reduce unnecessary pressure on our foreign reserves. So it is an economic issue and it is very deliberate. And we don’t expect that at all because there is no point.
“Why would you import cars at 70 percent while others are importing at 35 percent? So we do not expect to see anyone importing cars at 70 percent. It was just a measure to encourage people to go within the policy group”, he stressed.
On whether the policy may lead to increase in prices of imported cars, the minister said: “On our own part, because we are sensitive to price increases that had always been part of the policy, that is why we brought this policy in place. We will continue to monitor prices of cars every week. The policy, as it is, should not lead to any price increase if they are being fair to Nigerian consumers that are critical to us
“On used cars, in every country, when you have auto policy, used cars are banned even when there was a meeting of the auto manufacturers last week, they pushed for banning of used cars. “This government under this president, bearing in mind the socio-political environment we operate today and that most people import used cars, this government decided not to ban used cars.
“It will be the first country out of all the countries that have implemented auto programme that has refused to ban used cars at the time of implementation, because of the interest of the Nigerian people”, he said.
“The second thing which we have emphasized is to make it easier for those who buy used cars is to make sure that we work with the financial institutions to have car purchase scheme in the country, where they can borrow money to buy cars as long as you are working, at very reduced interest rate, not 20 percent.
“We are looking at very low interest, we are at advanced stage of negotiating that. We are doing that because we understand the issues with Nigerian public and we want to make sure this policy, once it is going to lead to so amount of jobs, we don’t unnecessary strain on Nigerians.
“If we don’t implement this policy, the pressure on the economy of this country will be unbearable because, we rely heavily on the importation of cars and this is not what we want to use your foreign exchange for.
“Today, we spend more than $3 billion every year on importing cars. We also spend another $3.2 billion and $3.4 billion importing used cars and spare parts”, he further decried.