Ban On Importation Of Tokunbo Cars: What You Should Know

Note: In their official statement, the Federal
government did not say they will ban
the importation of tokunbo cars. But their
new tariff will indirectly achieve that
purpose.
In effect, they are banning the importation
of tokunbo cars without expressly saying
so.
An article on this subject recently made the
front page. Unfortunately, the poster did
not
include what can be deemed the most
important paragraph which is:
[The Director-General, National
Automotive Council, Mr. Aminu Jalal]
added that
importers could still clear imported
vehicles at the old rates until February
28, 2014,
provided “they can prove that they had
opened a letter of credit for the vehicles
before October 3, 2013.”
This answers one of the questions many of
us have which is: When will the new tariff
come
into effect”? Now that we know it is
February 28, 2014, we can plan accordingly.
That part
is clear and concise. Unfortunately the
second part of that quote is not. In it, the
Director-General said:
…provided “they can prove that they had
opened a letter of credit for the vehicles
before October 3, 2013.”
Is he saying that tokunbo cars purchased
after October 3, 2013 will incur the new
higher
tariff? It is not very clear but that appears
to be what he is saying. In the meantime, it
will be advisable to thread cautiously on all
new imports until that statement becomes
clearer.
WINNERS AND LOSERS
A policy change of this magnitude will no
doubt have many winners and losers.
WINNERS: Once again, Cotonou will
become the main entry point for smuggling
tokunbo cars into Nigeria. This will enrich
the economy of Cotonou, their car dealers,
Border Agents on both sides and Cotonou
clearing agents. Local spare parts dealers in
Nigeria will also be favoured by this policy
as people use their cars for longer periods.
LOSERS: The obvious losers include
everybody that imports or sells tokunbo
cars. For
the past several years, importing a tokunbo
car into Nigeria has been so easy that even
a primary school boy can do it. That’s all
about to change for the worse. The average
Nigerian will also be a big loser. Soon he
can no longer afford a car (new or
tokunbo).
It remains to be seen whether this will be
good or bad for the Nigerian economy.
Government sources are claiming it will be
a positive development. But most Nigerians
including myself doubt it.
WHAT YOU SHOULD DO
If you have serious plans of buying a
tokunbo car, do it now. Do not wait any
longer.
Prices are bound to go up drastically once
this policy comes into effect early next
year.
http://www.punchng.com/business/
business-economy/fg-raises-tariff-on-
imported-cars/

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