Window of Opportunity for Dealers - Ship Cars to Nigeria via Benin Now

Posted By Alex Naumov on October 6, 2014 at 11:24 AM

Window-of-Opportunity-for-Dealers-Ship-Cars-Nigeria-via-Benin

Nigerian Import Duties Increase Use of Benin Port

Nigeria is a developing nation in the throes of economic growing pains. The country's population growth is exponential;  Lagos is predicted to be the world's 3rd largest city by 2015. Despite great disparity in the distribution of wealth, a burgeoning middle class is hungry for western amenities and the desire for family/individual car ownership is at the top of the list.  Not surprisingly, the government is encouraging investment in creating a car manufacturing base of its own through a combination of  public and private initiatives.

Read More What's Culture Got to Do with It? Options for Nigerian Car Importers

 

Ship Now or Pay More Later

In an effort to protect that investment and to redirect consumer preferences away from imported cars, the government has raised import duties and is expected to raise them substantially again before the end of 2014.  As a result, many dealers who ship cars to Nigeria, may consider going via Benin since import tax rates in Benin, at least for now, remain measurably lower. How long this differential will last is hard to predict, but as a member of the Economic Community of West African States, (ECOWAS) Benin could feel pressured to align its import policies with its more powerful neighbor.   

Powerful acronyms - The Rise of ECOWAS and More

This coalition, currently comprised of 15 member states, is considered one of the genuine, African  success stories.  While it has a peace-keeping agreement among members, its primary mission is to encourage regional economic cooperation.  Other agencies, including  the West African Economic and Monetary Union, (UEMOA) and the West African Monetary Zone (WAMZ)  were established to facilitate international trade. At present, the currency of several member states, the CFA franc, is pegged to the Euro.  Plans to introduce a common currency called the Eco is set to go into effect in 2015. So far six members, including Nigeria, have agreed to adopt the Eco as their currency with the long term objective of merging the Eco and the CFA franc into one central currency.

What Does the Mean for Dealers Shipping Cars to West Africa? 

Business owners are constantly faced with making important decisions with imperfect information. In this particular circumstance we do know a few things to be true:

  • Nigeria has already raised import duties and appears poised to increase them again
  • Developing West African states are modeling economic alliances based on the European Union and stand to increase their economic muscle.
  • ECOWAS has announced plans to implement a single import tariff on cars. If this goes through, the cost differential between Nigeria and Benin will disappear.

This suggests that dealers with inventory (especially used cars) may now want to ship cars to Nigeria via Benin and avoid the risk of future import costs. The Benin port of Cotonou is accustomed to handling large volume car shipments, and there is a well established chain of merchants likely to welcome car deliveries since the window could close down on them as well.  Long term we expect opportunities in Africa to keep expanding.

Read More Move Car Inventory to Tin Can Island Before it's Just More Tin

International Car Shipping Rates Quote

 

 

 

Topics: Africa, Market Trends




Subscribe to our Newsletter







Shipping Calculator



RSS Feed

Insane 900hp Corvette C7.R from Gumball 3000

When Chevrolet participates in endurance racing it uses the Corvette C7.R race car which produces just under 500hp. Apparently the horsepower was not enough for the owner of this Corvette C7.R...Read more

10 Incredible Cars For Sale At This Year's Monterey Car Auctions

Photo Courtesy of RM Sotheby's It's that time of the year again when thousands of incredibly special cars go on sale in California. Taking place each year, the Monterey Car Auctions attract...Read more

What the Proposed 2040 UK Ban on Internal Combustion Engine Vehicles Means For Classic Cars

The UK government has announced a plan to ban the sale of new vehicles powered by internal combustion engines starting in 2040. They also plan to impose further taxes on high polluting vehicles, and...Read more