For decades, imported used cars—fondly called Tokunbo—have kept Nigeria moving. These vehicles from the U.S. and Europe weren’t just machines; they were lifelines. Families relied on them for school runs, businesses for deliveries, and professionals for daily commutes. In a country where local auto production still struggles to meet demand, Tokunbo cars filled a vital gap—reliable, affordable mobility.
But today, that dream is rapidly fading. The Tokunbo market, once a symbol of practicality, is now in crisis. What used to be the go-to choice for the average Nigerian has become a luxury item. The cause? A punishing combination of unstable foreign exchange rates and soaring import duties. For millions, the hope of owning a car is no longer realistic—it’s slipping out of reach, taking part of the nation’s economic pulse with it.
💸 The Economic Storm: Currency Turmoil Meets Tax Pressure
The decline of the Tokunbo market starts with two unrelenting forces: the falling Naira and heavy-handed import charges.
1. The Naira’s Decline: A Financial Freefall
Every aspect of Nigeria’s import economy is tied to the Naira’s exchange rate against global currencies, particularly the U.S. dollar. For car importers, this creates a financial minefield.
When the Naira loses value, the cost of purchasing and shipping a car from overseas rises dramatically. A vehicle that once cost $5,000 now requires two or three times more in Naira. Importers, squeezed by this reality, are forced to pass the additional expense to buyers.
What makes it worse is the unpredictability—exchange rates can shift between the time a car is ordered and when it lands at the port. That volatility often turns profit margins into losses, pushing dealers to constantly revise prices just to survive.
2. Import Duties: The Hidden Price Tag 🚧
On top of the FX crisis are the steep import taxes and levies imposed by the government. Tariffs, the Import Adjustment Tax (IAT), and port handling fees together create another mountain of cost.
While the policy intent is to boost local car assembly and manufacturing, the reality on the ground is far different. Importers frequently lament that clearing a car at the port sometimes costs more than buying the car itself abroad. As these charges compound, Nigerians end up paying the price—literally.
📉 The Real Impact on Everyday Nigerians
The result is devastating: the price of vehicles has doubled or even tripled in just a few years. A car that sold for ₦5 million not long ago can now command ₦10 million or more. The fallout from this price surge is reshaping daily life for millions.
- Crushing Financial Pressure: For most families, a car is a necessity, not a luxury. It’s how they get to work, take children to school, or run small businesses. With prices now out of reach, many have been forced to shelve their dream indefinitely—or drain their life savings to make it happen.
- The Rise of ‘Naija-Used’ Cars: As imported vehicles become unaffordable, more buyers are turning to locally used ones—cars that have already served several years in Nigeria. While cheaper, they often come with hidden maintenance headaches and frequent repairs, making long-term ownership even more costly.
- A Ripple Effect on the Economy: When transportation costs rise, everything else follows. Delivery fees, logistics expenses, and even daily commute costs all increase. Small businesses suffer, productivity drops, and economic growth slows. The Tokunbo car crisis isn’t just about vehicles—it’s a reflection of deeper structural challenges within Nigeria’s economy.
🚗 A Dream on Hold
For decades, owning a Tokunbo car symbolized progress and freedom—a small victory for hardworking Nigerians. Today, that dream feels painfully distant. Unless the Naira finds stability and the government revises its import and duty policies, car ownership will remain a privilege reserved for a few.
For millions, mobility—the simple ability to move, earn, and live—is fast becoming a luxury they can no longer afford.
No comments:
Post a Comment