Why do Africans drive old beat up vehicles?

Did you know that if you import a new or used vehicle in West Africa, it will cost you about 45% of the value of the vehicle in tax and duty? No wonder it is a challenge to spot new vehicles on African streets, except if Government or NGOs since both are exempted, but vehicles imported from Europe, for the most part, that have already had one life cycle.

What is the point of such a high import duty? For one thing, it’s not to protect the regional automotive industry since there are none. It could be argued that this helps bring in funds into the public coffers or perhaps keep the informal economy going?

We believe that lowering import tax and duty on vehicles to reasonable levels would increase demands in newer vehicles, resulting in more imports, ultimately increase public funds, renewed national park of vehicles and less accidents on African roads. That’s development! Africans do not drive old beat up vehicles for the fun of it you know?

High import duties in West Africa contributes to significantly slow down development in several ways:

1. Increased Costs: High import duties raise the cost of goods, making it more expensive for consumers and businesses to access essential products and services. This can lead to reduced purchasing power and lower overall consumption.
2. Discouraging Investment: High tariffs can deter foreign direct investment (FDI) as investors may be reluctant to enter markets where they face high import costs. This can limit the influx of capital and technology that are crucial for development.
3. Limited Competition: High import duties can protect local industries but can also lead to monopolies or oligopolies, reducing competition. This can result in lower quality products and services, stifling innovation and efficiency.
4. Supply Chain Disruptions: Businesses that rely on imported raw materials or components may face delays and increased costs, which can disrupt production and lead to inefficiencies in the supply chain.
   Informal Economy Growth: High import duties can drive businesses and consumers to the informal economy, where regulations are less stringent. This can lead to a loss of tax revenue for governments and limit the ability to invest in public services.
5. Trade Imbalances: If local industries cannot compete with cheaper imports, it can lead to trade imbalances, affecting the overall economic stability of the region.

Addressing these issues often requires a balanced approach, including tariff reforms, investment in local industries, and policies that promote trade while protecting local economies!