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Prices Of Secondhand ‘Tokunbo’ Vehicles Soar Over Freight, Clearing Charges, FX

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Prices Of Secondhand

• Nigeria spends N601.51b on importation of autos in H1, 2021
• Freight price excessive as a result of delivery traces, airways cost for import, export on a single journey
• Clearing of autos in Nigeria is extraordinarily costly, low cost in Ghana, Benin, Togo

Costs of imported secondhand vehicles, popularly often known as Tokunbo autos, have gone out of the attain of common revenue earners.

The Guardian learnt that costs of Tokunbo and new vehicles within the nation have tripled attributable to excessive clearing charges and processing, excessive obligation, freight price, safety surcharges, insurance coverage on Nigeria-bound cargoes, unfriendly ports atmosphere, steady border closure and unlawful fees of presidency businesses, now worsened by excessive alternate price.

A survey of present costs of autos present that Toyota Camry 2004, which ought to ordinarily go for N1.6 million now sells for between N1.9 million and N2.1 million; Toyota Camry 1999/2001 offered earlier than at N1.4 million presently price N1.8 million; Honda EOD, which offered for N1.4 million earlier than is now N1.9 million to N2 million; Toyota Corolla 04/05 offered for N1.9 million is at present between N2.4 million and N2.5 million.

Toyota Sienna 1999/2000 earlier than was N1.3 million however presently goes for N1.8 million to N2 million; Toyota Corolla 09/10, which was going for N2.4 million is now offered for N3 million; Lexus 330 2005 is now N2.4 million from its earlier value of N1.9 million and Lexus 350 06/07 is now N4 million as towards N3.5 million.

Comparatively, costs of vehicles in neighbouring Benin Republic, Ghana and Togo have remained low and reasonably priced to the common revenue earners, cause Nigerians throng these nations to buy vehicles.

Additionally, Nigerian importers and foreigners divert their vessels to these nations as a result of ease of doing enterprise at their ports in addition to low cost clearing charges, freight charges and reasonably priced insurance coverage.

As an illustration, in Benin Republic and Ghana, the costs of the aforementioned autos are cheaper. Toyota Camry 2000 is CFA 1,900,000 (N1,398,658.27); Honda EOD – CFA 1,400,000 (N1,030,590.30); Toyota Corolla 05 – CFA 1,800,000 (N1,325,044.67); Toyota Sienna 2000 – CFA 1,300,000 (N956,976.71); and Toyota Corolla 09/10 – CFA 3,500,000 (N2,576,475.76).

A automotive vendor and Chief Government Officer, Mrpossible Vehicle Restricted, Saheed Adeola, stated the Nigerian Customs is benefiting from the continual closure of land borders, which has contributed to the excessive price of autos within the nation.

Adeola stated vehicles within the Benin Republic are low cost as a result of importers take their vessels there straight from the US, not like Nigeria the place the autos are introduced in from neighbouring nations.

One other automotive vendor, who’s the Chief Government Officer, Ifeseun and Affiliate, Ibukun Ifedayo, blamed the rising price of autos on hike in clearing and offloading charges on the ports.
He stated the offloading payment of a container with 4 vehicles that was initially N120,000 has risen to N300,000.

One other automotive vendor, Eddy Akwaeke, stated for a very long time, the price of clearing in Benin, Togo and Ghana has at all times been decrease than in Nigeria. He tipped Ghana as the perfect nation in West Africa with respect to the clearing of autos.

“By subsequent yr, the price of autos in Nigeria won’t be one thing any poor man will consider. Anyone who’s incomes his residing by way of official enterprise and planning to purchase a automotive ought to achieve this this yr as a result of, by subsequent yr, the scenario will worsen. Even when a brand new authorities is available in 2023, it’ll nonetheless take a very long time earlier than issues will normalize attributable to a number of coverage inconsistencies.”

ANOTHER cause why the price of used autos could spike within the coming months is because of imported inflation. Imported inflation is an increase in the price of uncooked supplies or completed items imported from a rustic of origin that’s experiencing excessive inflation.

The rising inflation on client items in the US is on the verge of triggering a wave of imported inflation into Nigeria, with a deal with used vehicles, a significant imported merchandise from the world’s largest economic system.
Over 20 per cent of Nigeria’s imports from the U.S. are used autos. On annual foundation, Nigeria spends roughly N600 billion or $1.2 billion importing used vehicles from the US alone, which is 90 per cent of its complete used car imports.

Deputy Nationwide President, Air Logistics, Nationwide Affiliation of Authorities Accepted Freight Forwarders (NAGAFF), Dr Segun Musa, stated the rise in the price of autos is because of a rise in freight price, delivery fees and unfriendly port operations.

He stated to clear any merchandise on the ports, one is compelled to pay by way of his or her nostril. “The best way we clear items at our ports is very unethical. It’s a must to bribe your approach by way of, else your items can be delayed and accruing demurrage.”

Musa additional famous that freight charges have elevated by over 200 per cent and that excludes different fees, particularly safety surcharges, as Nigeria’s ports and its corridors aren’t safe by worldwide maritime requirements. He added that the worldwide group elevated insurance coverage surcharges, which the delivery traces added to the freight cost.

“Whenever you carry any commodity from any area of the world, the delivery firms should pay safety surcharge to the insurance coverage firm in case something occurs. On the subject of safety, the charges are at all times very excessive. We don’t have our indigenous vessels. So, we’re on the mercy of international delivery traces. It’s both we patronize them or we don’t ship something. We’re left with no choice,” he lamented.

Musa defined that earlier than, to freight a 20ft container from Dubai to Lagos price between $2,000 and $3,000, however the price of freight now could be about $9,000, including that delivery traces and airways freighting to Nigeria cost for each import and export as a result of they return empty.
“This is the reason our freight fees are at all times excessive, coupled with the port fees by Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Security Company (NIMASA) and different businesses. Whenever you add all these collectively, the costs of autos can be costly as a result of the automotive vendor must make his capital and revenue,” he stated.
Musa stated for Cotonou, Ghana, Togo and different African nations, their freight charges are at all times low as a result of when vessels and plane are available with cargoes, they depart with cargoes, not like Nigeria the place they return empty.

He stated the federal government must put mechanism in place that can encourage native capability, which can in flip increase export as a approach of balancing commerce relations with different nations.

IN spite of the hassles on the ports, Nigeria spent a complete of N601.51 billion on the importation of motor autos within the first half of this yr. This was contained within the not too long ago launched international commerce report revealed by the Nationwide Bureau of Statistics.
This represents a 15 per cent improve in comparison with N523.57 billion recorded within the corresponding interval of 2020. Car imports accounted for 4.4 per cent of complete imports of N13.8 trillion recorded within the interval below evaluation.
In the meantime, a complete of N1.09 trillion was spent on car imports within the earlier yr. Going additional, within the second quarter of 2021, imports of passenger vehicles grew by 14.03 per cent to N311.63 billion in comparison with the corresponding quarter of 2020 the place imports for a similar merchandise stood at N273.28 billion.
Over the previous three years, Nigeria has steadily elevated its import of autos by 195 per cent from N371.98 billion in 2018 to N1.09 trillion in 2020. This may very well be on account of a rise in cab-hailing companies and applied sciences, like Bolt, Taxify and Uber.
Because the imports of motor autos elevated in Q2,2021, it made up 39 per cent of the entire transport tools and elements imported throughout the identical interval, which is N798.51 billion. Nigeria imported used autos, in any other case often known as ‘Tokunbo’ price N172.1 billion within the second quarter of the yr, being the third highest imported merchandise by worth.

Recall that in January 2021, the federal government revised the import obligation tariff for transport autos from 35 to 10 per cent as a part of the measures to ease the price of transportation throughout the nation and cut back the affect of coronavirus pandemic in 2020.

Nonetheless, in June 2021, terminal operators introduced a 50 per cent improve in terminal dealing with fees, which has discouraged importers of autos, which means that importers of vehicles now should pay double. As such, the import obligation tariff slash by the Federal Authorities has been drastically subdued by terminal fees and can’t have any optimistic impact on the working atmosphere or encourage car imports.

MEANWHILE, importers of autos have commenced the cost of N6,000 on clearing of cargoes below the Nationwide Car Registration Coverage (VREG), which was kick-started on the Tin Can Island Port on October 4. The Guardian learnt that the charges payable on VREG payment isn’t mounted, however in response to the capability of autos, the least being N6,000.
The Minister of Finance, Price range and Nationwide Planning, Mrs Zainab Ahmed, had through the launch of VREG two months in the past, stated the creation of this registry turned essential to deal with the menace of customs obligation evasion, car theft and smuggling, vehicle-related crimes and ineffective car insurance coverage protection, amongst different felony actions.
The Minister defined that the VREG is the centralised database for all autos in Nigeria utilizing their distinctive Car Identification Numbers (VIN), which shops detailed vehicular data reminiscent of specs, possession, and historical past of every car in Nigeria.

However importers and automotive sellers are, nonetheless, lamenting that the brand new charges would additional result in a excessive price of cargo clearance.
Reacting, spokesperson of the Nigeria Customs Service (NCS), Tin Can Island Command, Uche Ejesieme, stated VREG would put an finish to controversies overvaluation of autos. “The VREG is easy, it’s a repository of all autos, in order that on the finish of the day, all essential stakeholders, together with customs, would have entry to each details about the car, significantly for worth and statistics functions.”

Prices Of Secondhand

Costs Of Secondhand

Costs Of Secondhand

Costs Of Secondhand