Local Automobile Assembly Plants in danger over implementation of 2020 Finance Act ~PAN Chief
The implementation of the provision in the 2020 Finance Act, which slashed tariffs on imported vehicles could impact negatively on the operations of local Automobile Assembly Plants in the country.
According to the chairman of Peugeot Automobile Nigeria (PAN) Ahmed Wadada Aliyu, importers would flood the country with used cars and motorcycles and hindering the growth of the local automotive sector.
He projected that Nigeria will import used cars and motorcycles worth N3 trillion in 2021.
“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 motor cycles valued at N1.28 trillion.
“It means in 2021, Nigeria is likely to go berserk and triple the amount to N3 trillion. Forty percent of the budget on importation of all manners of used cars is a direct consequence of the tariff reduction.
He also described the recent tariff reduction on automobiles as a policy somersault from 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.
Aliyu said the new policy will impact PAN Kaduna Limited, which has 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.
“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.”