• Tuesday, May 28, 2024
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90% of vehicles bought without credit facilities, says CPPE

Nigerians shift gear to Chinese cars on volatile naira

The chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf, has said that over 90 percent of vehicle purchases in Nigeria are done out of pocket.

Yusuf, in a document titled “CPPE comments on 2023 fiscal policy measures” issued on Wednesday and sighted by our correspondent, said it was difficult for Nigerians to own vehicles in a situation where the credit facilities exist, the interest rates were outrageous and range between 25-30 percent.

“There is limited access to credit for vehicle purchase by Nigerians. Over 90 percent of purchases are done out of pocket, which is extremely challenging.”

He however said it is difficult for the government to justify this high import duty on vehicles for the following reasons.

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“Nigeria is about 90 percent dependent on road transportation, which underscores the importance of motor vehicles in the economy. There is an increasing affordability problem for citizens with regard to vehicle acquisition, especially by the middle class of Nigerian society. Costs of locally assembled vehicles are beyond the reach of most Nigerians, contrary to the assurance given by the government at the inception of the auto policy.”

He said that the economy had experienced huge exchange rate depreciation, which had already exacerbated vehicle acquisition costs in the first place.

Yusuf added that it was insensitive of policymakers to “impose a whopping 40 percent import duty on vehicles in an economy where there is no mass transit system and where vehicle ownership has become a necessity, especially for the middle class”.