Tariff: Peugeot says many local assembly plants will shut down

• Nigeria to import N3tn used automobiles this year

Many vehicle assembly plants in Nigeria including Peugeot Automobile Nigeria (PAN) will shut down their operations this year following a recent reduction in import tariff on vehicles by the Federal Government.

Chairman of PAN, Ahmed Wadada Aliyu, who stated this, also predicted that Nigeria would import used cars and motorcycles worth N3 trillion this year as a result of the new policy.

Aliyu, who is a former member of the House of Representatives, condemned the tariff reduction on imported vehicles, describing it as a policy somersault.

The policy was based on the recommendations of the Automobile Standing Committee set up by the Federal Government through the Bureau of Public Enterprises (BPE) to examine factors hindering the growth of the automotive sector.

Ahmed, who spoke on Tuesday in Abuja during a media parley on ‘The tariff regime for automobile assembly plant in the 2020 Finance Bill’, accused the Comptroller-General of Customs, Col. Hameed Ali (rtd), of succumbing to the lobby of vehicle dealers with no matching investments in local vehicle assembly.

Aliyu expressed concern that the new policy would affect PAN Kaduna Limited, which had already secured a financing of $150 million over the next three years for its operations.

He added that the tariff reduction would mean the imminent closure of PAN and other auto assembly plants.

“The tariff portion of the Finance Bill was stepped down. But to our dismay, it was smuggled again into the Finance Bill and subsequently approved,” he stated.

He accused the Customs boss of abusing the direct access that he has to the presidency.

He said, “The Nigeria Ports Authority revealed in December 2020 that 13 vessels off-loaded used vehicles at the terminals. In 2020, the country imported used vehicles and motorcycles valued at N1.28 trillion.

“It means in 2021, Nigeria is likely to go berserk and triple the amount to N3 trillion. Forty per cent of the budget on importation of all manners of used cars is a direct consequence of the tariff reduction.

“The comptroller general intends to flood Nigeria with ‘Tokunboh’ vehicles and ensure the closure of all assembly plants whereas the assembly plants have put in place a car financing scheme for Nigerians to own brand new vehicles at affordable rates.

“We strongly believe the comptroller general succumbed to the lobby of ‘Tokunboh’ dealers who are glorified car dealers with no matching investments in local vehicle assembly, and without linkages and value chain components that can precipitate long term industrial growth of Nigerian economy.

“PAN Kaduna Limited has just been acquired and has already secured a financing of $150 million over the next three years, and the implication of this review means the imminent closure of PAN and other auto assembly plants due to misguided recommendations by the comptroller general.

“We categorically state that this tariff review will become more detrimental to the long-term competitiveness that the automotive industry must achieve if it is to play any dominant role in Africa continental free trade area.”

But the Nigeria Customs Service (NCS) dismissed the PAN chairman’s allegation, saying that Nigerians are happy with the new policy.

Public Relations Officer of the NCS, Mr Joseph Attah, said the position of the NCS was well known on the matter, adding that Nigerians were happy with the reduction of tariff on imported vehicles.

“Our position is well known and Nigerians are happy. Anyone can criticise our position. What you then ask yourself is on which grounds. I am not a businessman, but when people criticise based on their interests, I don’t know what you want me to say. Our position is well known and anyone can criticise us,” he stated.