…says it will do the country more harm than good
BY Mcanthony Onuoha
Africa Association of professional Freight Forwarders and Logistics in Nigeria, APFFLON,has advised the Federal Government to trade with caution as it comes up with a decision to slash duty on imported cars/vehicles from thirty five percent to Five percent.
Speaking to newsmen at its Ikeja Secretariat yesterday, the National President of the association,Otunba Frank Ogunojemite said he was amazed that the federal government can take such decision at a time like this, describing it as unfortunate.
The Federal Government, through the Vice President, Prof. Yemi Osinbajo had at the opening plenary session of the 26th Nigeria Economic Summit (NES#26) recently, on the theme ” Building Partnerships for Resilience”, said that its decision to slash duty on imported vehicles in the country was not an attempt to kill the country’s automobile manufacturing industry,but to reduce the cost of transportation on the people in the face of growing economic challenges.
The decision which has sent a wrong signal to Local manufacturers of automobile is being seen as one of those unfriendly policies of the Federal Government as it will definitely do manufacturers more harm than good.
At the summit, a penalist, Chidi Ajere,said that the decision by the federal government to cut the duty imposed on imported vehicles from thirty five per cent to five percent was a disincentive to the prospective and existing investors in the local manufacturing of vehicles.
Recall that the federal government years back announced a policy to encourage private sector to go into local manufacturing of automobiles which made some indigenous manufacturers to begin partnering with some foreign investors in the building of plants for the manufacturing of made in Nigeria vehicles.
Reacting to the new policy, APFFLON said that one thing that has stood as a bane of our national growth and progress is policy somersault, saying that it does not in any way give confidence to investors as progress made within a space of time can be reversed at any point in time even without prior notice, adding that such instability does not encourage investors.
Furthermore, APFFLON through its National President, said that the federal government would have only slashed to five percent, duty on essential vehicles like ambulances, fire fighting vehicles and mass transit buses, lamenting that the decision will serve as a disincentive to local manufacturers at a time other countries are encouraging local manufacturing.
Buttressing the decision, the vice president at the summit said that the logic in the policy has always been that if duties and levies are increased on imported cars/ vehicles,local production will become more competitive.
But APFFLON reacting pointedly to a statement by the Vice President, Prof Yemi Osinbajo, in favour of the new policy, that “if duty is not slashed on cars/ vehicles, it will mean higher prices of vehicles and greater stress on other sectors of the economy that depend on transportation at a time of national economic emergency, especially with rising food prices and transportation,”APFFLON said that the federal government has been slow with its rail project, saying that a timely completion of the rail project will help to combat the challenges of transportation across the federation, adding that slashing duty on imported cars/vehicles, even when the same federal government banned the importation of certain categories of vehicles years back, and imposing high duty on latest models just to discourage importation of vehicles, is like a dog going back to its vomit,describing it as a decision taken in bad faith.
It will interest you to know that APFFLON before now, had in a letter dated 18th November,2020, with reference number, APFFLON/HQ/P/0001/20,and addressed to the President, Federal Republic of Nigeria, advised government on the need to slash 35% Customs duty on Ambulances and medical equipment amid Covid19 Pandemic.
APFFLON also expressed fear in the area of loss of job, saying that making local automobile manufacturers to close shop means swelling the number of those in the labour market as many people will definitely lose their jobs.
The association also said that the federal government, as a key player in the Africa Continental free Trade Agreement is at this critical time taking a decision that will impact the initiative negatively, saying that by slashing duty on imported cars/vehicles, Nigeria will become a dumping ground for all manner of vehicles, at a time local automobile manufacturers should have been given support to take advantage of the free trade agreement regime to assert themselves in the African automobile market.
APFFLON advised that rather than slashing duty, the federal government should look inwards to see how it can improve transportation system by investing in sea and cable transport as these will ease gridlock in major cities, as well as make movement from one place to the other easier and faster.
Continuing,the association thereby called on the federal government to take a second look at the decision with recourse to the progress made so far by local automobile manufacturers , in order not to ruin its accomplishments so far in that very sector, saying that a city is not built by raising structures and demolishing them.