Assessing the Impact of Ban on Vehicles through Land Borders

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Although the expectation is that the federal government ban on importation of vehicles through the land borders will improve ship and cargo traffic at the nation’s ports, yet prices of vehicles in Nigeria have gone up by more than 50 per cent, writes Francis Ugwoke

In the next two weeks, the ban on importation of vehicles through the land borders would be two months. It is one policy measure that would have impact on many Nigerians. Already, the effect is beginning to be felt by various stakeholders . The effect could either be positive or negative. For the ports, the landlord of the system, the Nigerian Ports Authority (NPA), the Nigeria Customs Service, NCS and terminal operators, it has been a good economic measure. However, it is a different thing for the small importers, customs clearing agents specialising in the border stations and the larger Nigerian low income earners. A visit to Seme and Idiroko border stations shows that there has been a lull since the past few weeks since the ban took effect. For the vehicle dealers and clearing agents, there has not been any business.

Many of the agents have had to sack their staff. Some have had to relocate to the seaports to find business. It is the same for those whose business in the borders is to smuggle cars through the porous routes. For customs officers in the border posts, everywhere is tight as nobody wants to be found wanting at such a critical time in the life of the Nigeria Customs Service. With recent interception of a container of 661 pump action rifles illegally released at Apapa port, every officer is on his toes at his duty post. Apart from the arrest and detention of the three officers involved, there is the likelihood that the officers would be prosecuted. It would be the end of the career of the officers. With this in mind, every officer posted at the border routes is careful not to allow any illegality that will put him at the risk of losing his job.

The Ban
It was in the first week of December last year that the federal government announced the ban on importation of vehicles through the land borders. The ban was said to have been suggested by the Comptroller-General of Customs, retired Col. Hameed Ali, who felt that it would address years of revenue losses to the federal government. It was gathered that the Customs does not realise enough revenue from the border posts as a result of fraudulent practices at the border stations involving officers and importers. Apart from huge revenue losses through smuggling of vehicles through porous border routes with the connivance of some unscrupulous customs officers, importers who pass through the official channel to bring in their goods short-change the government in duty payment on vehicles. They do this by conniving with some customs officers. So, by placing a ban on importation through the land border, the federal government has ended the revenue losses as every importer of vehicle into the country would have to go through the seaports.

Rising Prices of Vehicles
Since the ban took effect, the prices of vehicles in the country have gone up by more than 50 per cent. This is for two reasons. Cars which come through the border posts are usually cheaper because the duty is not the same with those that come through the seaports. Besides, before the ban, any Nigerian can easily cross the border and buy any car of his choice for personal use at a cheaper rate. There are many Nigerians who had to simply go to Cotonou to buy their car instead of going to the car dealers here in the country. It is the same for some dealers who bring in their cars through the border stations and are prepared to offer better prices. With the ban, such chances are no more. A car dealer, Mr Tony Ovie, who spoke to this writer said that the ban on importation of vehicles through the land borders had left low income earners to their fate. With the rate of inflation and hardship in the country, he said only very few Nigerians with low income will be able to save to buy cars of their dream. He added that this would equally be the fate of small scale transporters who would need to buy Tokunbo buses.

Losers
The December ban on importation of vehicles through the land borders has dealt a big blow on many importers, who may not want to go through the seaport. The process involved in bringing goods through the seaport takes a lot of time and resources. Many small time importers do not bring vehicles through the seaports. They use the land borders. Those are the ones that buy like three or five vehicles, or even one and bring back into the country to sell. It takes them a matter of days and the vehicles are in Nigeria. In this category of importers, you find those, who are ready to pay duties and those who simply ‘fly the cars’, a phrase for smuggling their vehicles in and getting fake import documents for registration. This explains why some of the vehicles are intercepted on the way by the Customs after they have been sold.

Even when the importers pay duties, government would still have been short-changed. It is not the same for big time importers who would go to Europe, buy cars in dozens and bring them into the country. As much as there is no system that is without fraud, it cannot be compared with what happens at the border routes. So, with the ban, all the fraudulent practices through which government loses huge sums of revenue are put to check. Now, it would be suicidal for any importer to try to smuggle any vehicle through the bush paths into the country. The risk is very high.

Gainers
For the NPA, Customs, terminal operators, shipping companies and customs agents operating in Lagos, this is a period to smile. It is expected that the Customs which revenue target for this year is N900billion will meet this target as all the loopholes in the border posts have been closed. It is the same for NPA, shipping companies and the terminal operators which revenue is determined by the traffic at the ports. Although, the maritime sector has been hit by the larger economic recession and the Central Bank policy on foreign exchange, it is expected that there will be an improvement this year compared to what the situation was last year. An official of the NPA said that there was optimism that the traffic would improve in the next few weeks. The official, who pleaded for anonymity said it was too early to expect so much increase in traffic as some people were yet to decide on the next line of action after the closure of the border routes. It is expected that by the middle of this year, traffic at the ports in terms of increase in vehicles import will begin to show clearly.

A customs agent, Mr Kasie Ejike, told said right now, some importers who have been using the border were yet to decide on using the seaports. “They have been waiting to see if government can change its mind on the policy based on the call for this by many Nigerians, including members of the National Assembly. So, if it becomes clear that there is no going back, the importers will have no choice than to use the seaports”, he said. With improvement in the traffic at the ports, it is expected that the operators of the Roll-on-Roll-off (RORO) terminals, who have been worried for some time over the diversion of vehicles meant for Nigerian ports to neighbouring ports will be back to business. The RORO terminals have been hit by low traffic due to economic recession, forex crisis and high customs duties on vehicles.