NLC: New auto policy will inflict pains on Nigerians

The Nigeria Labour Congress (NLC) Monday joined the ranks of opposition to the new auto policy of the Federal Government, describing it as “lamentable” and capable of inflicting severe pains on Nigerians. The NLC President, Comrade Abdulwahed Omar who spoke in Kaduna at the Unions’ ongoing 12th Harmattan School 2013, specifically berated the Federal Government for its penchant for initiating policies capable of inflicting pains on the working people in the country.
The federal government made public the controversial policy on October 2, 2013. And if implemented, the policy would encourage local manufacture of vehicles, reduce foreign exchange demand by vehicle importers (which currently stands at about N550 billion) and create jobs, said its promoters. Under the new policy, as unveiled by the government, the deadline for the establishment of Form Ms for importation until February 28, 2014, under the old tariff was October 3rd. Until October 3, those wishing to import Fully Built Units (FBUs) passenger cars paid a duty of between 20 and 30 percent duty while that of commercial vehicles attracted a flat rate of 10 percent.
Also, under the new policy, the duty on passenger and commercial vehicles were upwardly reviewed to 70 and 30 percent respectively. What this means is that all importers who opened a letter of credit after the policy deadline of October 3 would pay a higher duty, while those privileged to have opened on or before October 2nd would pay the old rate.
Immediately the policy was approved by the Federal Executive Council (FEC), some stakeholders including the nation’s top auto dealers including: Elizade Motors, Globe Motors, Coscharis Nigeria Limited, CFAO Motors, SCOA, and Toyota Nigeria Limited, acting under the Auto Manufacturers’ Representatives Group in Nigeria have protested vehemently against the new policy as approved by FEC. The group had sent a petition to President Jonathan accusing the Aganga of acting unilaterally without recourse to those who will be affected by the policy.
More worrisome was the group’s allegation that one of the auto dealers, Stallion Group of Companies, had prior knowledge about the content of the policy and had used its fore-knowledge to have an undue advantage over its competitors.

The group had alleged that Stallion Group made use of its privileged information to open letters of credit to the tune of $382 million, which covers three years of import for 20,000 cars. The group also alleged that the speed with which Stallion Group opened the letters of credit on October 2nd while the FEC was still deliberating on the policy indicated it did so to beat the deadline and gain unfair advantage over others.
“It is obvious from this that the proposed automotive policy has been compromised and has resulted in providing undue advantage to one single group whose track record as a business entity has been monumentally notorious and whose owners have been deported twice in the last 10 years for economic sabotage,” the group said in the petition.
While calling for a review of the policy, the petitioners warned that if the policy is allowed to stand, Nigeria will lose about N134billion in revenue due to the leak in the information regarding salient portions of the policy.
While the government came out strongly to defend its policy and the potential economic benefits, more storms seemed to be gathering for the government over the policy. Currently, concerns are being raised over the government’s commitment to fight corruption and bring accountability to governance.
For the NLC President, the announcement of the new tariffs barely few weeks to the commencement of its implementation further confirmed people’s fear that the Minister of Finance was merely implementing IMF programme in the country. Omar said raising tariffs without providing an alternative would merely put the Nigerian people at the mercy of unscrupulous car dealers who would exploit the situation to create artificial scarcity with its attendant effects on transportation.
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), condemned the policy describing it as “harsh and not well thought through.