Car import in Nigeria dropped in the last five years due to forex scarcity.
Experts believe that the decline in Nigeria’s imports is attributable to the incessant shortage of foreign exchange and mounting pressure on the naira currency. In particular, the currency shortage and the exorbitant cost of processing imported cars at the ports have led to a precipitous drop in Nigeria’s vehicular imports, notably used cars, to the lowest level since 2018. According to figures released by Nigeria’s National Bureau of Statistics (NBS), the country imported used foreign cars worth N169.1 billion in the first half of 2022.
This represents a 51.2 percent decline from the N346.29 billion recorded in the corresponding period of 2021 and a 37.7 percent decrease from the N271.2 billion spent in the second half of last year. Figures released by the NBS show that Nigerians had spent the least on imported cars since the first half of 2018 when they forked out N59.1 billion on pre-owned vehicles. A similar trend can be seen with the importation of cycles and motorbikes into the country.
Foreign used car prices surge amidst FX scarcity.
Furthermore, it was revealed that the declining value of the naira on the international market has also led to a rise in the price of imported used foreign cars by an estimated 50% over the last year. For instance, the price of a Toyota Camry 2007 and 2009, which sold for an average of N3.3 million last year, has risen to a minimum of N4.1 million. A new Toyota Corolla has risen from a price of N2 million to over N3.5 million.
Similarly, a Lexus ES 350 (2007 to 2013 model) now costs an average of N5.3 million. It was sold for an average of N3.5 million as of this time last year. Car dealers in the country have lamented the scarcity of foreign exchange (forex) and its heavy toll on Nigeria’s automobile industry, stressing that the liquidity crisis has stifled importation and hiked the price of used foreign cars. They attributed the price surge to the cost of clearing the cars at the port and the significant depreciation in the exchange rate.
Car dealers raise concern over the price surge.
One of the dealers in Berger area, Lagos state, Emeka Agbi, also affirms that the falling exchange rate has affected the cost of buying cars abroad, while the cost of clearing the merchandise from the ports has also doubled. He said they initially clear for an average of N600,000 but have now risen to as high as N1 million, which has made it impossible to sell low-budget cars, as Nigerians would not be willing to buy early model cars at a high price.
Additionally, Akinjide of Auto Land in Ikeja, Lagos, stated that average income earners in Nigeria could not afford to purchase foreign-used cars anymore due to the hike in the price. Instead, they go for Nigerian used cars. He concluded by saying that people involved in the car dealing business are currently going through a hard time as sales have dropped significantly on the back of a hike in selling price, bedeviled by the increase in the cost of clearing vehicles and naira depreciation.
Naira decline hits one thousand naira against the US dollar.
Recall that in July 2021, the CBN stopped selling foreign currency to Bureau de Change on the grounds that the parallel market was being used to launder money and facilitate illegal currency exchanges. However, the naira has plummeted as a result of this move. As of July 29, Naira depreciated against the US dollar at the official market, declining 0.66 percent to N429.00 per dollar from N426.20 at the Nafex window the day before. The currency has recently plummeted to as low as N1000/$ due to a deficit in foreign exchange supplies as demand soared.
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Importation on foreign cars falls due to scarcity of dollars while the prices of purchasing this cars within has surge due to pressure on naira it keeps calling to exchange rate against dollars.The government needs to do something about all these.
Now dollar is at the max of our currency note. Our currency just continue declining against US dollar day by day as if nothing is been done while its making it hard for us to trade internationally. Adequate measure needs to be taken before it ravages all sectors too.
The increase of dollar in our currency note as make thing increase in price things are cost so it will affect the car it cannot be same amount a car was bought last year with this year because of increase of dollar it really affect our economy
The persistent lack of foreign exchange and the mounting pressure on the naira currency are to blame for the decrease in Nigeria’s imports and that is something that the government should work on.
The drastic decrease in Nigeria’s vehicular imports can be attributed to a lack of available currency as well as the exorbitant cost of processing imported vehicles at the country’s ports.
The shortage of foreign exchange (forex) has taken a significant toll on Nigeria’s automobile industry, according to vehicle dealers in the country. They stressed that the liquidity issue has hindered importation and raised the price of old foreign cars.
We ought to be aware that they ascribed the increase in prices to the cost of clearing the cars at the port as well as the large depreciation in the exchange rate, and both of these explanations are accurate.
The fall in exchange rate has affected the cost of buying cars abroad, the cost of clearing vehicles worsen the whole thing. The government needs to do something.
Due to the rising cost of clearing vehicles and the depreciation of the naira, those in the car-dealing business are having a tough time as sales have plummeted on the back of a spike in selling price.
The government needs to take action to address all of these issues because the importation of foreign automobiles has decreased because there is a shortage of dollars, but the prices of purchasing these automobiles within the country have increased because of pressure on the naira, which keeps calling to exchange rate against dollars.
The fall in our forex is what has caused this fall in importation. We really need to then produce ourselves to help our economy. We should produce more in excess and export and not us importing almost every time.
Because of the rising cost of clearing vehicles and the depreciation of the naira, those in the car-dealing business are having a tough time as sales have plummeted on the back of a spike in selling price.
If Buhari can’t rule this nation. He should resign from being president of this nation. He has failed in every aspect of this nation. Even car can’t be imported without spending exorbitant amount of money. Our government shouldn’t be blaming inflation, what are you doing about it to regular or control it.
import in Nigeria dropped in the last five years due to forex scarcity. Everything is wrong with This country, government has really failed us
Dealers in the country’s vehicle market have criticized the effects of the shortage of foreign exchange (forex), saying that it has restricted imports and driven up the price of secondhand foreign automobiles.
Car dealers are having a hard time as sales have plummeted due to a price hike, increased cost of clearing vehicles, and naira depreciation.
Due to the dropping value of the currency, the cost of purchasing automobiles in other countries has increased, while the cost of clearing products from the ports has also risen.
This is terrible our currency is fast loosing value. Even clearing of tokunbo cars is too expensive. With all the resources we have in this country our wasteful government couldn’t even annex that opportunity but will rather go and borrow to fund the budget.
It was found that the rising cost of imported old foreign cars by an estimated 50% over the previous year was also a result of the naira’s deteriorating value on the global market. The exchange market requires action from the government.
Nigeria’s vehicle imports, particularly secondhand automobiles, have precipitously decreased to their lowest level as a result of the currency crisis and the expensive expense of processing imported autos at the ports.