Nigerians are heavy users of used vehicles, popularly called Tokunbo. It isn't surprising this article is coming up here on Naijauto.com, as we cater for Nigeria’s' need for cars, ranging from brand new to tokunbo used to Nigeria used here on our car listing site.
Data and figures have been drawn to know Nigeria’s overall spending on used vehicles. The article's focus is on the country's importation of used cars from the US for the year 2018.
The importation of used vehicles into Nigeria in 2018 has been estimated to be at $526 million. This figure comes at ₦161 million in Nigerian currency. On the other hand, the money spent on importing used cars in 2017 was $284 million and it's about ₦87 billion.
The Department of Commerce, in the US, released a yearly report. The report has it that 82,180 units of used vehicles were imported from the US last year, 2018, while 48,899 units were imported in 2017. The report indicates that there was a 68% increase in the number of used cars imported into the country.
2018 recorded the highest money spent on importation of used vehicles, since 2015
From 2014-2018, data showed that the total estimate of used cars imported was $189 billion. In 2014, the amount recorded as been spent for used vehicles in Nigeria is $633 million. And in 2015, the money dropped to $272.7 million.
The year 2015 marked the beginning of a rise in the amount spent on used vehicle importation. The money spent in 2018 (₦161 million) gave the hint that there has been a surge in the importation of used vehicles since 2015.
Nigeria ranked 3rd highest importer based on import value
The total value Nigeria spent on the importation of used car from the US placed the country as the 3rd highest importers of used cars.The country ranking in the 1st place for the highest importers of used automobile from the US is United Arab Emirate (UAE). This country is leading with $776 million spent in 2018. The 2nd place country following UAE is China, importing used vehicles at an estimated value of $556 million.
UAE, China and Nigeria import most used vehicles from the USA
Overall, the amount generated by the US from the exportation of used vehicles for the year 2018 is $13.7 billion.
Nigeria ranks second when it's based on the unit of vehicles imported
Looking at the units of imported vehicles, UAE is still taking the lead, having imported 129,495 used cars in 2018. However, they imported 99,674 used cars in 2017.
Coming to Nigeria,82,180 units were bought from the US in 2018. This is making Nigeria be the 2nd highest importers after UAE. Since 2018, Nigeria has been recording an unrivaled number of used vehicles imported in five years.
Take for example, the country imported 77,211 units of used vehicles in 2017. The figure increased in 2018.
Shipping data from Nigeria Port Authority also showed there was an increase in imported vehicles
The shipping data culled from Nigeria Port Authority (NPA) reported that not less than 229,690 number of used vehicles were brought into the country via the seaport, from 2017 to 2018.
The data also revealed that 12,400 used cars came in from the Mediterranean zone via Tincan port. A shipping line from Italy called Grimaldi Group conveyed the vehicles to the country.
Its effect on the economy
The Vice President, Prof Yemi Osibajo made the following statement in the 19th Abuja Motor Fair held in 2018,
He made mention of the government's commitment towards industrialization of the country and the billions of naira that leaves the country as a result of car importation.
The increase in the Importation of used cars has several effects on Nigeria’s economy.
It will affect the creativity, innovativeness, and manufacture of cars in the country. Foreign exchange used to pay the importation fee will exert pressure on the country's exchange rate when the demand for foreign exchange rises.
The increase in used car importation is harmful to the development of domestic manufacturers
Since Nigeria is engaging in more import than export, the country's trade of balance will get worsened.
In a bid to discourage Nigerians from importing cars and start patronizing locally made cars like Innoson, the importation tariff on cars was raised by the government. This happened in 2014, under President Good luck Jonathan's administration.
The move was aimed at reducing car importation while growing the local auto industry and also create job opportunities for its citizens.
There is still work to do by the present administration to restore the automotive industry in Nigeria.
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