Nigeria’s Vehicle Imports Plunge by 32% Amid Naira Depreciation
In 2023, Nigeria witnessed a sharp 32% decline in motor vehicle imports, totaling 132,293 units compared to 194,550 in 2022, reflecting the sustained depreciation of the Naira, according to data from the Nigerian Ports Authority (NPA).
Financial Vanguard’s investigation revealed a significant downturn across various import categories, including ship traffic, cargo traffic, container traffic, and berth occupancy.
Excel Magazine International reports that the Naira’s unprecedented depreciation saw the official exchange rate averaging N820/USD1 in 2023, a stark contrast from N460/USD1 the previous year, with the parallel market rate closing at N1,090/USD1, down from N720/USD1 in 2022.
Stakeholders in the import trade sector anticipate further deterioration in 2024, with the exchange rate surpassing N1,400/USD1, exacerbating the already challenging trade environment.
Despite stable or decreasing procurement costs abroad, domestic factors such as increased customs duty, clearing costs, and port charges have led to a minimum 45% and, in some cases, 75% surge in vehicle prices.
This escalation has significantly impacted business, with dealers experiencing dwindling patronage and poor sales amid escalating economic hardship, forcing citizens to reprioritize expenditures away from personal vehicle ownership.
According to Mr. Emenike Nwokeji, National President of the Association of Nigerian Licensed Customs Agents (ANLCA), the depreciation of the Naira and high import duty rates are the primary drivers behind the decline in vehicle imports.
Dr. Muda Yusuf, CEO of the Center for the Promotion of Private Enterprise (CPPE), emphasized the urgent need for government intervention to address the situation, highlighting the prohibitive costs driven by exchange rate fluctuations and associated charges.
Car dealer Sowole Abiodun echoed concerns over the exorbitant costs of importing vehicles, stressing the necessity for Naira stabilization to mitigate further import declines and price hikes.
Looking ahead, stakeholders urged government action, advocating for a review of import duties to make vehicles more accessible and curb smuggling activities.
They emphasized the need for a comprehensive approach to boost exports and streamline bureaucratic processes to facilitate trade and economic growth.
