Nigeria - New custom tariffs on imported vehicles (tokumbo cars) too expensive for local sellers

Nigerian website to advertise used cars selling

Last December, the federal government in Nigeria decided to introduce new custom tariffs (Thisdaylive, Dec. 2013) on imported vehicles, the so called "tokunbo cars", fairly used carsusually sold by local sellers also through the internet on websites like flingnow.com. After the protests of associations of local sellers, such as the National Association of Government Approved Freight Forwarders (NAGAFF), the policy should be substantially revised (Ajetun Blog, Feb. 2014).

However, it seems from more recent articles that the Nigeria Customs Service (NCS) has commenced full implementation of the 70 percent tariff on imported vehicles (Business Day, Mar. 2014). The idea of the Federal Government to discourage the importation of used cars, which represent the 85 % of imported cars, should support and develop the local automotive market and industry as already done in the past by countries like Pakistan, India and South Africa as declared Dr. Olusegun Aganga, Minister of Industry, Trade and Investment.

The measure, per se, could be a good incentive to facilitate the establishing of a local automotive industry. However, the increase of the tariff from 22 % to 70% could just annihilate the current market stocks and a modification addressing the needs of the sellers would be advisable. Income deriving from higher  taxation could not balance the plausible collapse of sells.

In the meantime, as written on the magazine African Review, Kia Motors, the South Korean car manufacturer, signed an agreement with its local car distributor Dana Motors to set up a vehicle assembly plant in Nigeria within two years. (Issuu - African Review Magazine, Apr. 2014). What will happen next?