Forex scarcity: Nigeria’s car import drops to lowest level in 5 years

Nigeria’s vehicular imports (especially used cars) has fallen to the lowest level since 2018 as a result of the forex scarcity and high cost of clearing at the ports among other factors, Blueprint has gathered.

According to Nigeria’s international trade data released by the National Bureau of Statistics (NBS), Nigerians imported foreign used cars worth N169.1 billion in the first half of 2022.

This represents a 51.2 per cent 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.

The latest NBS figures show that Nigeria’s car imports fell to the lowest levels since the first half of 2018 when Nigerians spent N59.1 billion on used cars. The same trend applies to the importation of motorcycles and cycles in the country.

It was also gathered that the cost of importing foreign used vehicles has increased by almost 50 per cent in the space of one year due to the dwindling fortunes of the Naira on the international market.

For instance, a Toyota Camry 2007 to 2009 model that was sold for an average of N3.3 million last year has increased to a minimum of N4.1 million.

Also, 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. In the same vein, the price of a Toyota Corolla increased from N2 million to over N3.5 million.

Car dealers in the country have attributed the surge in the price of foreign used cars to the increase in the fees associated with clearing the cars from the ports as well as the significant depreciation in the exchange rate.

The naira, which started the year at an average of N565 against the US dollar, has fallen to as low as N1000/$1 bedeviled by actions of currency hoarders, speculative-induced demand, high demand for foreign education, as well as a decline in FX inflows.

According to one of the dealers at Berger area in Lagos, 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.

Emeka Agbi said they initially clear for an average of N600,000, but has 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.

Also, Akinjide of Auto Land in Ikeja, Lagos stated that regular Nigerians cannot afford to buy foreign-used cars anymore due to the hike in the price. Instead, they buy 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, which is caused majorly by the increase in the cost of clearing vehicles and naira depreciation.