Nigeria’s car import skids 45% as forex woes bite

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Nigeria’s vehicle import industry has been hit hard by the country’s ongoing foreign exchange crisis, with a staggering 45% decline in imported cars reported in the first quarter of 2024. This revelation comes from Comptroller General of the Nigeria Customs Service (CGC), Adewale Adeniyi, during a recent interview with Arise Television.

“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.

• Rising tide of imports threatens Nigerian economy as Naira loses ground
• Nigeria’s inflation soars as imported food prices bite
• Sharp 49% decline in domestic transactions raises concerns on Nigerian Stock Exchange
• CBN intervenes in Forex Market, Naira strengthens
• Tinubu appoints Adewale Adeniyi as Comptroller-General of Customs

Adeniyi attributed the slump to the volatility in exchange rates, making car imports a less attractive proposition for businesses and individuals alike. The resulting uncertainty disrupts planning and inflates costs. This phenomenon wasn’t limited to vehicles; Adeniyi noted a decrease in overall imports, suggesting a broader impact on the Nigerian economy’s ability to access essential goods and raw materials.

The news highlights the ripple effects of a struggling foreign exchange market. Car dealerships have borne the brunt of the decline, with significantly fewer vehicles entering the country. This translates to potential revenue losses for the government through customs duties, on top of the hampered economic activity.

However, Adeniyi expressed cautious optimism for a potential second-quarter recovery. He pointed to ongoing discussions aimed at stabilizing the forex market, which could breathe life back into the import sector.

Key questions remain:

• Will the forex situation improve in the coming months, and if so, how quickly will car imports rebound?
• How will this situation affect car prices for Nigerian consumers? Will there be a shift towards locally-assembled vehicles?
• What long-term solutions can be implemented to ensure Nigeria’s import sector remains resilient in the face of forex volatility?

As Nigeria grapples with its forex challenges, the auto industry serves as a microcosm of the wider economic impact. The coming months will be crucial in determining the extent of the recovery and the potential for long-term solutions.

Tags: Nigeria, Car, Imports, Customs, Adewale Adeniyi, Nigeria Customs Service, Forex, Arise Television, Foreign Exchange