Monday, Apr 19th 2021 12:48 AM

Market Digest Nigeria


AMDON urges FG not to ratify ECOWAS emission standards

Association of Motor Dealers of Nigeria (AMDON) has spotted errors in the proposed Economic Community of West African States (ECOWAS) fuel grade and vehicle emission standards regulations, which is due for implementation on January 1, 2021.


In a statement at the weekend in Abuja, AMDON urged the Federal Government to withhold its assent to the regulation. It said: “The Federal Government of Nigeria should suspend the implementation of the ECOWAS fuel grade and vehicle emission standards regulation and consult widely with key stakeholders with the aim of reviewing errors in the final ECOWAS report to prevent a major socio-economic pitfall, with its inevitably great consequences.”

AMDON National President Ajibola Adedoyin noted that “further assessment of the proposed ECOWAS regulations as recommended by ICCT has revealed many errors and inconsistencies”. He added: “While the ECOWAS consultant submitted in its report that the implementation will result in net benefits to the societies to the tune of $107 billion between the period 2019 and 2050, a preliminary independent analysis has determined that the $107 billion net benefit presented in the final report is incorrect.

“In fact, the implementation of the ECOWAS regulation will have a net cost of $78.1 billion, with approximately two-thirds of the net costs impacting on Nigeria negatively.” Adedoyin explained that while the consultant’s final report assumed the cost of newer vintage vehicles is 297 per automobile, based on incremental cost of improved vehicle emission control system, findings revealed that the estimated cost of purchasing newer vehicles is a whopping $11,065.

This, said the chairman said, does not include the significantly higher cost of replacing diesel vehicles, which are the major sources of pollution. The AMDON President said while the report did not consider the huge incremental technology cost and incremental operating cost of implementing the regulations, a preliminary independent study had placed such cost at $106.4 billion and $10.7 billion respectively.

He noted that the costs would further place a huge burden on the Nigeria’s already stressed foreign exchange, saying: “The regulation has a comparably less societal and net benefits, as claimed by the ECOWAS consultant.” Adedoyin said due to other errors discovered in the recommendations of ECOWAS consultant, AMDON expressed worry that Nigerian consumers would be confronted with substantial increases in the cost of automobiles and fuel prices at a time of significant economic uncertainty and recession, should the Nigerian government implement the regulation, as proposed.

The chairman said the ECOWAS Commission will soon issue a directive to member countries on the regulations to restrict the importation of passenger vehicles of not more than five years and heavy duty vehicles of not more than 10 years. According to him, the implementation of the regulation will have significant negative socio-economic consequences on Nigerian consumers with only minimal and health benefits.

Source: The Nation
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