Written by Bolaji Akinola
Former Minister of Industry, Trade and Investment, Olusegun Aganga will be remembered as the man who destroyed the operations of RORO ports in Nigeria and championed the diversion of Nigeria-bound vehicle imports to the ports of neighbouring countries.
Aganga also helped fuel smuggling and facilitated the sack of several hundreds of Nigerians at the ports through his selfish and ill-conceived National Automotive Policy.
Several well-meaning Nigerians raised their voices of wisdom advising against the implementation of the controversial policy but was self-opinionated and strong headed.
When the auto policy was introduced by him mid-2013, he deceived Nigerians into believing that within six months, Stallion Motors, Nissan and others would begin to assemble cars in Nigeria. That did not happen.
On May 29 2014, Aganga and his gang presented so-called assembled in Nigeria SUVs to President Goodluck Jonathan as ‘Democracy Day’ gifts.
The three vehicles presented to the President said to have been produced at the Stallion Nissan Motors Plant located on the Lagos-Badagry Expressway included a Nissan Patrol SUV, Nissan Almera (Sunny) saloon car and a Nissan NP 300 Pick-Up.
The company claimed that it was ready to roll out 45,000 units of vehicles annually but apart from those three; no Nigerian can claim to have seen any such car on the road. There are doubts if those were actually ‘made’ here. This is so as the Nigeria Customs Service has accused several so-called auto assembly plants of less than noble conducts. They import fully built units of vehicles under the guise of SKDs or CKDs to take advantage of loopholes in the ill-conceived policy.
I was in London on June 23 last year at a seminar on “Business in Nigeria” organised by the Financial Times and the Nigeria Customs Service, where Aganga tried desperately to sell the policy to the international community. He again claimed that the policy has attracted 14 Original Equipment Manufacturers (OEMs) to the country who were ready to “roll out before the end of the year”. It is more than one year yet nothing.
The case has been said of a company which imported over 200 units of fully built vehicles, without tyres, and declared them as semi-knocked down units in order to benefit from the huge tax rebate put in place by the federal government as part of the automotive policy to encourage local assemblage of vehicles.
There are two degrees of SKD, known as SKD1 and SKD2. Most local vehicle assembling plants in Nigeria at the moment are using SKD2, with very little local content, but they pay shortchange Nigerians.
SKDs attract 10% tariff while fully built units attract 70%. So they remove the tyres only and claim SKD. They then import the tyres separately. This is Aganga’s auto policy.
Car dealers and mass transit companies now import their vehicles using this trick. They all lay claims to being auto assembly plants. It is fraud at its highest level. So the big guys pay 10% while the small time importers pay 70%. Those that do not want to pay 70% diver their vehicular cargoes to Cotonou Port and smuggle into Nigeria.
The prices of vehicles shot up more than 40% since Aganga’s infamous policy. For example, a new KIA Piccanto car that sold for about N1.6million before the introduction of the loathsome policy now sells for N2.2million while a Hyundai Elantra which cost N3.3million now sells for N4.9million.
The Aganga gang even went as far as deceiving Nigerians that very soon, local production won’t only meet local demand but will be sufficient enough for export.
Aston Motors, Dana Motors Ltd, Basco Nigeria Ltd, Coscharis Motors Ltd, General Appliances (West Africa) Ltd, Globe Motors, Hyundai Motors Nig. Ltd, Kewalrams-Chanrai, Nigeria-China Auto Manufacturing Coy Ltd, Nigerian Sino Trucks Ltd and Origin Automotive Works all lay claim to being auto assembly plants.
Aganga and his boss took Nigerians for a ride. The auto policy has increased the rate at which cars are smuggled into Nigeria with our ports losing close to 70% of their vehicle cargo traffic to Cotonou Port. And the vehicles landed in Cotonou eventually find their way into the Nigerian market. The implication of this trend on is grave not only on Customs revenue but on the income of the Nigerian Ports Authority, terminal operators, port workers, freight forwarders and haulage firms.
History tells us that this policy will not work. We have gone through this route before and it failed but Jonathan and Aganga would not listen to the voice of reason.
One is wont to wonder whose interests Aganga really tried to protect.
President Muhammadu Buhari should come to the rescue. Nigerians are suffering as a result of this obnoxious policy. It should be suspended while import duty on vehicles revert to 20% flat for everyone. Preferential or differential duty rate must be scrapped immediately
We want to see these ‘auto assembly plants’ begin to truly roll out made in Nigeria vehicles.
Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.