Price May Drop Soon as Importers Abandon Tokumbo Cars in Ports, Vehicle Import Falls to 4,000
- The Nigerian Customs Service (NCS) has decried the rate of abandoned vehicles at Nigerian ports
- The service said the development is due to the high foreign exchange rate and naira devaluation
- Clearing agents have said that the development will lead to a massive selloff of abandoned cars at the ports
Nigerian Customers Service has lamented that vehicle import at Tin Can Islan Port has declined from 32,000 in 2018 to 4,000 in 2023.
The import dropped to 6,000 in 2021 from 32,000 in 2018, declining further to the current 4,000.
Source: Getty Images
Naira crash causes cargo abandonment in Nigerian ports
The drop has been blamed on the country's naira devaluation and high exchange rates.
PAY ATTENTION: Share your outstanding story with our editors! Please reach us through info@corp.legit.ng!
The development has caused the management of Tin Can Islan Port to express concerns over the decline in cargo in the last five years.
Dera Nnadi, Customs Area Controller of Tin Can Island Port command, disclosed the trend during a courtesy call by the Association of Nigerian Licensed Customs Agents (ANLCA) executive.
He revealed that the command needs help to meet its revenue target due to the shortfall.
He said the drop in revenue is not due to incompetence but the global recession.
The Tin Can Island Command chief stated that many vehicles remained abandoned in the port due to high exchange rates.
Nnadi revealed he is expected to generate about N350 billion apart from the one the command has realized in the last three months.
Daily Trust reports that the command realized about N3 trillion in 2022 and could surpass the figure due to the new appointment of an officer as the head of the service.
Emenike Nwekeoji promised the association's support to realize its goals.
Brown Clement, a licensed clearing agent at the Tin Can Island Port, told Legit.ng that the development could lead to a drop in the cost of Tokunbo vehicles.
He said this is because the Nigerian customs might want to decongest the port and would need to conduct an auction to sell off the vehicles.
Brown said:
"Recently, the Minister of Marine and Blue Economy stated that over 6,000 cargoes have been abandoned at various ports across the country. So, Nigerians should not be surprised the Customs and NPA begin auctioning off vehicles and other items."
Customs hike tariff by 40%
The development comes as the newly introduced 40% hike in the exchange rate for cargo clearance at the seaports and hikes in tariff on imported vehicles by terminal operator Ports and Terminal Multipurpose Limited has caused about 70% decline in the sale of fairly used or second-hand imported cars in Nigeria.
The Central Bank of Nigeria (CBN) and the NCS recently took the ongoing forex reforms to the maritime sector with a 40% hike in the exchange rate for calculating the import duty.
Punch reports that the NCS raised the exchange rate to calculate import duty from N422.30 per dollar to N589 per dollar.
Prices of imported vehicles soar.
Legit.ng earlier reported that prices of foreign used cars, also known as "Tokunbo," increased three times in some regions, inflicting hardship on Nigerians and constraining the economy.
According to The Sun report, Vehicle dealers point out that the worrying development results from the naira's sharp fall amid market volatility.
Other contributing factors are hefty customs, levies, taxes, the Nigeria Customs Service's (NCS) VIN valuation policy, increased poverty, and diminished consumer purchasing power.
FG releases new details as value of Tokunbo cars in Nigeria falls by 47% in 2022
Legit.ng also reported that the National Bureau of Statistics (NBS) says the value of used vehicles dropped by 47% in 2022, to N335.05 billion from N617.48 billion in 2021.
The NBS data revealed that used cars with diesel or semi-diesel engines cost around N72.32 billion to import in Q1 of 2022, N96.76 billion in Q2, about N90.77 billion in Q3 and N65.19 billion in Q4 of 2022, computing about N325.05 billion.
Source: Legit.ng
