THE JUST GAZETTED REDUCTION IN IMPORT LEVY ON BRAND NEW CARS FROM 35% TO 5% BY THE NIGERIAN GOVERNMENT IS ANOTHER FOLLY POLICY
By Maazi Obinna Agommuo
Executive Director, ESGADIA.
Nations rise and fall on the Alter of Leadership. The economic growth of Nations are catalyzed by effective good policies.
Nigeria being the largest black nation on earth ought to be leading the rest of Africa through formulation of policies that are not only investor friendly but that will engender the growth of her GDP and create the much needed jobs for her citizenry.
The just signed Financial Act for the reduction of import levy on brand new cars from 35% to 5% is another policy capable of sending a number of Vehicle Manufacturing companies in Nigeria packing. The Policy is not just counterproductive but folly at once.
Quite a huge number of Manufacturers in Nigeria have shutdown their plants due to one Government objectionable policy or the other.
For example, In 2006, Michelin Nigeria shutdown its Tire Manufacturing plant at Port harcourt River State and abruptly laid off over 2000 direct workforce and over 8000 indirect employees.
In 2008, Dunlop on their own part laid off about 2500 direct employees and over 8000 indirect labor due to some Federal Government of Nigeria injudicious policy on imported tire. The then Government of President Olusegun Obasanjo had reduced the import duty on Tire from 40% to 10% and the two tire manufacturing plants could not compete with substandard tires that were been and still being imported from China to flood the Nigerian market.
This Government of President Muhammadu Buhari is on the same trajectory of shutting down Local manufacturers through policies which are obnoxious and counterproductive.
For God sake why reduce the tariff on imported brand new vehicles at a time the rest of the world is deep-necked into Electric Vehicle manufacturing, why now that the rest of the world is going green? Is this the time Nigeria would want to flood her market with Fossil fuel driven vehicles? Rather than encourage her local vehicle manufacturers by way of patronage and giving them buffer incentives, the Federal Government of Nigeria has chosen to stifle the business of those in the Automobile Industry.
The Government of Nigeria should rather focus on how to reduce the emission of Greenhouse gasses by encouraging the manufacturers to go into the production of Electric vehicles as this is the mobility for the future. Fossil fuel is far losing its shine and sheen in the world today and Nigeria and indeed Africa can not be in isolation. Government should channel its resources towards the development of renewable energy as both the sources; Sun, Wind, Water etc and the raw materials; Metals for Renewable energy equipments are readily available in Nigeria and other parts of Africa.
I don’t want to believe that the reduction of the levy on imported new vehicles are politically motivated to suffocate the businesses of certain individuals as been peddled in some quarters.
There are products that the Government of Nigeria should think of reducing their tariffs or reverse to their status quo if she truly meant well for Nigerians, not tariffs on vehicles.
For example Clinker which is a major component of cement was increased from 10% to 40% forcing several Cement Industries to shutdown their operations leaving only the “Beggar Thy Countrymen” to dominate and monopolize the Cement market resulting to the price of Cement catapulting from 1000 Naira per bag to over 4000 Naira per bag of 50 Kilograms.
Even the withdrawal of the two Cement Import Licenses; Bagged Cement and Bulk Cement Licenses earlier given to Companies from the Six Geopolitical Zones of Nigeria by the late President Yardua Administration was uncalled for. President Yardua Administration saw that the price of cement crashed by encouraging healthy competition among Cement producers and importers which forced the price of cement downwards that even the middle class were able to build houses and live in. But today over 20 million housing deficit out of 50.6 million housing deficit in Africa is recorded against Nigeria alone due to high cost of Cement caused by the intrigues of the Federal Government as she covertly or do I say overtly supports “Beggar Thy Countrymen” policy of non compete, thereby creating scarcity of commodities particularly Cement in Nigeria, otherwise why increase the import duty on Clinker which represents close to 80% and sometimes more of Cement composition to that high tariff if you cannot regulate the price of locally made cement. Agreed, the components of Clinker; Clay and Limestone are readily available in Nigeria but how many Entrepreneurs who wish to go into Cement production in Nigeria are licensed by the Ministry of Mines and Steel Development of Nigeria to own Limestone and Gypsum deposits without having to contend with the “Beggar Thy Countrymen” cabals and their cohorts in Government?
I am an industrial revolutionist and an advocate of Backward Integration, but what is good for the goose should also be good for the gander in Nigeria. You can’t shut other people out from engaging in healthy competition and you want to reduce the price of commodities in the Market, you don’t say you want to create jobs and you want only very few individuals in certain strategic industries.
Nigerian Government should learn to separate politics from economy when the lives and well being of Nigerians are involved.
Nigeria has all it takes to be very great and lead the rest of the world but corruption has eaten into the nucleus of the Nation and Government is to be blamed as she fans the embers of corruption in both the public and private sector of Nigeria.