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vehicle import

Transport stakeholders have said the Federal Government’s recent reduction in vehicle import duties and levies has provided only modest relief, stressing that exchange rate volatility, high freight charges and multiple taxes continue to limit the policy’s impact on Nigeria’s transport sector.

The stakeholders, who spoke in separate interviews said while the policy has slightly reduced vehicle clearing costs, broader economic challenges have prevented it from significantly lowering vehicle prices and transport fares.

Chief Executive Officer of Ojigwe Automobiles, Nwachukwu Kenneth, said the duty reduction had led to lower clearing costs, particularly for small-engine and fairly used (Tokunbo) vehicles since early July.

According to him, the development has resulted in a slight increase in customer enquiries and purchases of fuel-efficient vehicles. However, he noted that the gains remain limited due to exchange rate instability.

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Kenneth identified high freight charges, port handling costs, the National Automotive Council levy, the 7.5 per cent Value Added Tax (VAT), clearing fees, inflation, logistics costs and limited access to foreign exchange as major factors keeping vehicle prices high.

He said the policy could benefit transport operators and buyers of affordable vehicles if supported by exchange rate stability, lower ancillary charges and improved economic conditions.

A vehicle dealer, Haruna Sanusi, also described the policy’s impact as minimal, attributing the slow response to persistent exchange rate fluctuations. He added that inflation, fuel prices and the willingness of importers to pass cost savings on to consumers would determine the success of the initiative.

Similarly, a commuter, Adeniji Adeyinka, said the policy’s full benefits may take years to materialise due to limited implementation.

He noted that while there could be some short-term improvements, transport operators remain cautious as they monitor exchange rate movements, fuel prices and the full implementation of the policy before adjusting vehicle prices or transport fares.

Adeyinka added that fluctuating fuel prices have made it difficult to assess the immediate impact of the duty reduction, although long-term benefits remain possible.

Also speaking, transporter Agnes James urged the Federal Government to complement the policy with reductions in freight, shipping and port handling charges.

She said lower logistics costs would enable transport operators to renew their fleets, reduce passenger fares, expand their businesses and create more employment opportunities, although fuel and maintenance costs would continue to influence operating expenses.

Another transporter, Arinze Ezeigwe, said the policy had made little noticeable difference, noting that the prices of vehicle spare parts and fuel remain high despite the reduction in import duties.

The Federal Government recently announced a reduction in vehicle import duties and levies to make vehicles more affordable for individuals and businesses, lower transportation costs and improve access to newer vehicles.

However, industry stakeholders maintain that the initiative will only achieve its intended objectives if accompanied by broader economic reforms, including exchange rate stability, lower logistics costs and improved port efficiency.

The Traffic NG
vehicle import
Afusat Adebayo
The Traffic NG

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