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Tuesday, December 5, 2023

‘There was no plan to ban tokunbo vehicles’: Minister Of Trade And Investment Says

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Minister of Trade and Investment, Olusegun Aganga has re-affirmed that there was no plan to ban used (tokunbo) vehicles imported into the country “as was being speculated by certain misinformed quarters.”

He stated that all tokunbo vehicles that fall outside the list of those that government had approved for imports would attract 70 percent duty.

Aganga, who spoke to THISDAY shortly after what he described as a successful Trade and Investment Framework Agreement (TIFA) meeting with US investors and State Department Trade Representative in Washington, said the recent auto policy of the federal government had been misrepresented with half truths necessitating the need for continued clarifications.

The minister said: “there was no real controversy on the restriction of imports. What is happening in the country is that we want to develop without embracing change. There was a misunderstanding and misrepresentation of the policy and we needed to engage and explain the truth to the people.

“The misinformation was that we were banning tokunbo vehicles but the truth is that we are not banning tokunbos.”

Aganga who had earlier been introduced by Nigeria’s ambassador to the US, Professor Ade Adefuye, in an address to Nigerians in Diaspora, US and Nigerian investors said the country had all the potential to produce what it needs and even export “which is why the Goodluck Jonathan administration has come out with a bold industrial revolution blueprint.”

“The truth of the matter is that when you bring in CKDs into the country, it is at zero percent duty; when you bring in SKDs it is at five percent duty; when you bring in SKD2 it is at 10 percent duty; and for those that are assembling cars in the country, they can bring in cars of the same make. For every one car they produce, they can bring in two new cars at 35 percent duty. It is only those that are not in the auto programme that will attract 70 percent duty.”

The minister said the idea is to encourage interested investors in the auto sector to go into local assembly.
However, he noted: “We are not just looking at the assembly of cars; we are looking at developing capacity for spare parts for car components, so that we will have enough to service our local industry but more importantly to even export that, to develop the skill and standard that will allow us to do that.”

He said this policy was not just restricted to the auto sector but across the value chain to develop rubber into tyres; to go from gas into petrochemical; to the plastic industry, and from iron ore to metals “because we need all of those across the value chain and a lot of jobs will be created because of that.”

Aganga who was in Washington to discuss with US trade representatives on how to promote the non-oil sector through leveraging on the AGOA using best practices expressed worry on rising cost of imports but said with the new policy, Nigeria’s current balance of payments that gulps well over $3.4 billion on car imports would drastically come down.

He said: “By the time the auto policy goes into action, the country would be in a position to produce affordable cars with more Nigerians placed in a position to buy such cars rather than tokunbos.

“I think because we got the policy right, we have been very lucky because of the quality of investors coming into the auto industry. So, seven days after the policy was announced, Nissan said ‘we are coming to invest in Nigeria and co-partner with your local investors and by April we will roll out our first Nissan cars.”

“You have the likes of Hyundai coming into the country. Peugeot Automobile that was here before will start assembling in June. Peugeot’s assembly plant in Kaduna is still an impressive facility.”

On how this policy will not cut the competitive edge of existing assembly companies as Innoson Motors, the minister said: “Innoson today is very excited about the policy. I drive Innoson’s car in Abuja. Innoson was in my office some three weeks ago. He signed an agreement with two Japanese companies partnering with him in the past 14 years. When the President launched the industrial revolution plan, you could his products there.”

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