Forex Crisis: Nigeria's Vehicle Importation Declines by 45% in Q1 2024

There has been a significant decline of 45% in vehicle importation due to the ongoing foreign exchange crisis.

The Nigeria Customs Service Comptroller General, Adewale Adeniyi, revealed that vehicle importation declined by 45% in Q1 2024 due to foreign exchange challenges in the nation.

During a recent interview with Arise Television, Adeniyi highlighted a critical period for Nigerian citizens and businesses due to the volatility in exchange rates.

“It affected car dealers. We had as much as a 45 per cent decrease in the volume of cars that were brought into Nigeria in that period.

“And they were not the kind of cars that fetched optimum revenue for the customs. Not only cars, but even regular imports were also affected because people could no longer import raw materials as they wanted and the volatility did not allow them to plan for tomorrow,” the CGC stated.

He expressed optimism regarding the positive trajectory observed in the second quarter of the fiscal year.

“But we see some relative degree of stability in the second quarter because there are lots of discussions going on. Some at the level of the National Assembly, most of them spearheaded by the Minister of Finance and Coordinating Minister of the Economy, bring on the stakeholders that are involved together, to ensure that we achieve stability.”

In reference to the ongoing private jet owners’ verification process, Mr. Adeniyi reported a noticeable departure of several private jet owners from Nigeria since the announcement of the verification exercise.

He indicated that the departing aircraft do not wish to be inspected. It has come to our attention that since the commencement of the aforementioned exercise several weeks ago, only a select few owners have presented themselves.

“Very few of them have shown up for verification and we gathered from intelligence that a good number of them have been leaving Nigeria since the announcement was given because they would not want to be verified,” he asserted.

As per Adeniyi’s statement, upon importing an aircraft and completing the registration process, the owners are required to approach the Nigeria Customs Service to settle any applicable customs duties, assuming the aircraft will be utilized within Nigeria.

The CGC explained that the service initiated a verification process for private jet owners to ensure compliance with legal regulations. This action was taken in response to an increase in private jet operations that were not adhering to the established laws and regulations.

“We have seen so many of these aircraft flying and our record tends to show that only a few of them have shown up to pay duty and this is why we are bringing this verification up,” he said.

The CGC disclosed that information obtained from the Nigerian Civil Aviation Authority indicates a discrepancy between the number of private jets operating within the country and those that have fulfilled their customs duty obligations.

In 2019, the service generated N2 billion in revenue when the exercise commenced.

“Recall that this was not the first time we did it. We did something close to this in 2019 and the exercise fetched us as much as N2bn within the short time that we did it.

“We discovered that there were more private jets that were operating in Nigeria but had not been brought under the ambit of the law. So, the data that we got from the NCAA showed that only very few of them paid customs duty to operate in Nigeria,” Adeniyi stated.

As per the customs authority, private jets utilized within the Nigerian airspace are subject to duty payments in accordance with international aviation regulations.

“If they are here for a brief period in the Nigerian air space and go, they are not obliged to pay any duty. If they were here on a temporary importation visit but once they are here and used within Nigeria, they are liable to pay duty,”

The CGC reaffirmed that the verification exercise was intended to ascertain which entities were operating within the legal framework and which were not.

The customs officer indicated that the increase in fuel prices in neighboring countries was a significant factor motivating smugglers.

“When you get open source intelligence, you discover that the prices of fuel in neighbouring countries create a lot of incentives for smuggling.

“In Benin Republic, a litre of fuel is between N1,500 and N1,600. In Cameroon, it is high as N2,000 per litre. So, when we have this kind of thing around our neighbours and we are still doing a litre between N710 and N720, there is already an incentive because the price difference is very wide,” he averred.

Adeniyi reiterated that the department was working closely with pertinent organizations to guarantee real-time monitoring of product transportation from their depots.

Mr. Adeniyi mentioned that the department is actively working to resolve the welfare concerns of its employees.

“In terms of remuneration, working conditions, adequate payment of houses when due, and even in terms of reviewing the basic salary of officers, efforts are in progress and I want to believe that by the third quarter of 2024, we will make some of these known to officers to serve as motivation for them,” he explained.

It Is worth noting that the department is actively working to address the welfare concerns of its employees.

“Promotions used to be quite stagnant. However, we are now collaborating with the customs board. We have an agreement that every year, on January 1, we will release promotions for deserving officers. We successfully implemented this in January 2024, and we anticipate that the next batch of officers will benefit from this initiative in January 2025, receiving salaries commensurate with their new ranks,” he stated.

July 04, 2024