Motor dealers urge Customs boss to probe ‘short payment’ practice

Nigeria's automotive import sector faces fresh scrutiny as the Association of Motor Dealers of Nigeria (AMDON) has formally escalated allegations of systematic tariff underpayment within the Nigeria Customs Service (NCS). The group has petitioned Comptroller-General Adewale Adeniyi to investigate what traders call "short payment" practices—a euphemism for alleged collusion between highway enforcement units and importers to deliberately understate vehicle duties, depriving the state of revenue while distorting market competition.

## What exactly is the "short payment" practice in vehicle imports?

"Short payment" refers to a scheme where imported vehicles are assessed at artificially low tariff values at Customs checkpoints, allowing dealers to pay reduced duties while NCS officers allegedly pocket the difference or accept bribes. Rather than declare a vehicle's true landed cost (CIF value plus logistics), importers negotiate downward valuations with highway enforcement teams. This practice has persisted despite Nigeria's recurring foreign exchange crises and the government's reliance on tariff revenue to fund operations.

## Why is AMDON raising the alarm now?

The timing reflects two pressures. First, Nigeria's naira depreciation has made legitimate vehicle imports significantly more expensive, creating incentive for corners to be cut. Second, honest dealers face unfair competition from those benefiting from reduced tariff burdens. AMDON's complaint signals that the integrity gap has widened enough to threaten market viability for compliant operators. The association's appeal directly to the Comptroller-General bypasses regional Customs commands, suggesting frustration with on-the-ground accountability.

## How does this affect Nigeria's import duty regime?

Vehicle imports carry among Nigeria's highest tariffs—typically 35–50% of CIF value depending on engine size and age. When short payment occurs systematically, it undermines the entire tariff structure designed to protect domestic assembly plants (Indomie Motors, BUA Group, others) and generate government revenue. The NCS reported ₦3.74 trillion in duty collection in 2023; underpayment on high-value vehicle shipments could represent billions in losses annually. For investors, the scandal highlights regulatory inconsistency—tariff enforcement varies by checkpoint, creating unpredictable cost structures across supply chains.

The broader context is Nigeria's struggle with customs modernization. Despite adoption of the ASYCUDA++ system, human discretion at physical checkpoints remains significant. Officers operating highway enforcement units (particularly on routes from Lagos ports toward interior markets) occupy enforcement positions with minimal digital oversight, creating corruption vulnerability. AMDON's complaint implicitly indicts not just individual officers but the command structure that permits such autonomy.

Adeniyi, appointed in 2021, has prioritized digitalization and anti-corruption messaging. However, this complaint tests whether rhetorical commitment translates into structural reform. A credible investigation could restore dealer confidence but risks exposing systemic weakness in the NCS. Conversely, dismissing the complaint signals that political protection shields bad actors—a scenario that would accelerate informal import channels and further erode tariff legitimacy.

For vehicle importers and logistics operators, the near-term implication is uncertainty: will enforcement tighten (raising costs for all) or remain inconsistent (rewarding those with checkpoint connections)? Either outcome reduces operational predictability.

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