The Rising Cost of Car Ownership in Nigeria: Challenges for the Working Class

The article discusses the current challenges faced by working-class Nigerians in car ownership, highlighting the shift from new and fairly-used cars to Nigerian-used vehicles due to economic pressures. The prices of used cars have skyrocketed due to tariffs and the unstable foreign exchange rate. Experts emphasize the need for government intervention and consider the impact of a growing population alongside the failure of past governments to foster economic growth.

The increasing financial strain on the working-class in Nigeria has made car ownership increasingly difficult. During a recent corporate training, a facilitator reminisced about purchasing a new Volkswagen Beetle for N3000 in the 1970s, highlighting how automobiles were once common incentives for new hires. However, such days have become a distant memory as the current economic landscape prohibits many from affording new vehicles.

In recent years, the market has shifted towards Nigerian-used cars, primarily due to the unaffordability of both new and fairly-used imported vehicles caused by economic hardships and unfavorable exchange rates. Major platforms such as Car45 and CarsToday now offer predominantly used vehicles, often facing scrutiny regarding their condition due to poor maintenance and road conditions.

The prices for even older used models reflect this trend, with a Nigerian-used Toyota RAV4 2003 model approaching N4 million in cost, while similar models of newer years can range dramatically in price based on condition and region. For instance, a 2010 model can vary from N6.6 million to N18 million, highlighting the extreme costs associated with purchasing a vehicle in Nigeria.

Many auto dealers, such as Nuhu Ismaila and Emeka Nwokoye, have transitioned to selling Nigerian-used vehicles due to the skyrocketing prices of fairly-used cars, which have become prohibitively expensive. Ismaila noted that the demand for cheaper, locally owned vehicles is growing despite consumers being aware of their often poor condition. Legal professionals like Marcel Gemade indicated that for many, Nigerian-used vehicles are the only feasible option amidst overwhelming economic pressures.

Auto dealer Johnson Eremuye correlated rising car prices with increased tariffs on imported vehicles, which have compounded the effects of an unstable foreign exchange rate. The cumulative burden of import duties and fluctuating currency adds to market instability, ultimately leading to significantly inflated prices for vehicles. This scenario is causing a growing number of dealers to consider alternative business ventures.

Izuchukwu Ezeokoli, managing director of Izzy Cars International, shared similar concerns, emphasizing that the consistent rise in vehicle prices is likely to persist due to ongoing economic challenges. To address this, economist Olushola Adenuba called for improved government policies that support local manufacturers and financing options for prospective buyers.

Finally, experts debated the role of Nigeria’s increasing population and the failure of past governments to create sustainable economic growth, leading to an environment where car ownership remains unattainable for many. This highlights the need for strategic changes that could restore accessibility to vehicles for future generations.

In conclusion, the narrative of car ownership in Nigeria has dramatically shifted from one of accessibility to significant barrier, largely due to economic hardship and inflated costs. The rise of the Nigerian-used car market reflects both a response to economic pressures and an adaptation by individuals and businesses alike, though the quality and condition of these vehicles often raise concerns. Addressing these challenges requires proactive policy changes that support the automotive sector and ensure broader access to affordable transportation options for the populace.

Original Source: businessday.ng