Why Are Imported Goods Excessively Expensive In Nigeria? - Business - Nairaland
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| Why Are Imported Goods Excessively Expensive In Nigeria? by WebJunior(m): 9:08am On Mar 13, 2008 |
I have noticed that imported goods are extremely expensive in Nigeria? below is one of the basic analysis that triggers this question. A 2000/2001 HONDA ACCORD AKA (babyboy) motor car in Nigeria is around 1.5 million naira, and that's even cheap. This is just one example out of many, similar thing applies to computer importation and other valuable products that Nigeria as a whole could benefit from. First my exchange rate convertion is xe.com, so my calculation is based on the exchange rate at the time of my posting! Now in the UK this car only worth about £975. So let's follow the illustration below; Car Purchased in UK = £975.00 about (230,000 Naira) Exportation Cost = £250.00 about ( 59,000 Naira) Clearance Cost in Nigeria = £852.00 about (200,000 Naira) Profit =  ---------------------------------------------------------------------------------- TOTAL = £2,077 about (489,000 Naira) ---------------------------------------------------------------------------------- So back to the alarming figure 1,500,000 Naira - 489,000 Naira =1, 011, 000 Naira[color=#990000][/color] (1) So what happens to the 1, 0011, 000 Naira excess? (2) Are there other hidden charges we do not know about or is this the profit car dealers make generally in Nigeria? (3) If the excess here is the profit how many common fellow citizen have the chance of owning a car? May be my analysis is wrong, someone please put me right! |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by obua: 7:37pm On Mar 13, 2008 |
Profit motive in Naija is high so traders tend to go for a kill. Your costing for a y2k honda is on the low side. A good y2k+ car is well above 4000 Euro ie well above £3000 |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by brownbonno(m): 8:14pm On Mar 13, 2008 |
WebJunior: Your analysis doesn;t represent the actual situation.I wonder where you got that information. Firstly,UK cars are right hand drive cars and Nigeria have not got a market for them. Secondly,you can;t get that car for such a price. TFinally,no shipping company/agent will ship a car to Nigeria for £250. |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by Davidoil: 1:18am On Mar 14, 2008 |
Hello Brownbonno, I think you shed a heavy beam of light through your answer to that question. The only thing I was considering was the outrageously low Exportation Cost of 250GBP. Someone in Nigeria who needed to receive a laptop from his daughter in the Rep. of Ireland said DHL required about 97 euros to get that done. In proportion to the export of a vehicle, I also agree with you that that amount is not realistic. To Your Success David |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by akinalabi(m): 2:32am On Mar 14, 2008 |
I'm not sure about your figures but if you're confident they are right, then you have a money maker on your hands. Rather than moan, I suggest you go for the "killing" as well. |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by JosBoy4Lif(m): 3:25am On Mar 14, 2008 |
Supply and Demand, introductory microeconomics. If people are willing to pay above the market price, then so be it, |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by WebJunior(m): 3:17am On Mar 15, 2008 |
obua: brownbonno: Sorry, I "lied" about the cost of exportation, the initial figure is £450 and not £250, so add extra £200 about (48,000 Naira) on top of the shipping cost, still not justified, though I agree that UK cars are right handed and no market for them, but this is not my point, this is just an example out few I know, so be it imported from Germany, Canada or US, still makes no much difference as not most people can afford imported goods, just because of the price tag. I like to know why imported goods are "excessively" expensive in Nigeria?, if everyone is has the "Go For The Kill" attitude, what's going to happen to the common citizens that cannot afford imported goods? And please note using that car as an example does not neccessarily mean I'm targetting it, car prices are various, based on make, model, milage, fuel etc. This article started right from my office, having a chit chat with few of my colleagues about sending goods home for business, turned to a debate, when it comes to the point of making profit these guys attitude were like "Go For The Kill", "If u can't beat them, join them" and stuff like that. One actually told me "all you need to do is send to cars home, you don become millionaire, and with your profits you buy two more cars" It's alarming.  |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by Etin(f): 3:15pm On Mar 15, 2008 |
When things are priced low to undercut the market in Nigeria people assume you have fake goods. You cant win can you? |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by erico2k2(m): 9:13pm On Mar 15, 2008 |
Hi guys, I live in the UK,I managed to send my Dad a Merc 300E, the price of shipping at the time in 2006 was £500 at this point, II'mshipping a VW passat to nNigeriaand its costing me £550 as at May 2008, these are acactualigures and also both cars are Right Hand cars, as for you guys who said there are no markets for RHD cars in Nigeria, big lie, trust the Nigerian Mechanics, the managed to figure out how to convert RHD to LHD perfectly even in Auto cars you wont know the didifference all you got to do is buy the dashboard and the steering rack, I have managed to expand to 5 cars a time now, if there anybody in EU or America who has Dashboard to sell, fell very free to mail me,would be very hahappyo hear from you guys in Germany and USA, LHD dash only one love guys.  |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by brownbonno(m): 9:43pm On Mar 15, 2008 |
erico2k2: The shipping price is usually between 500-600 all depends on your agent. Modifying a RHD to LHD is not good for business except for personal use. You did not specify the clearing cost in Naija,i am sure the car is less than 8 years old(because of the restrictions). |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by erico2k2(m): 9:48am On Mar 17, 2008 |
Guys, I'm stating the Actual price to ship a Vw passat from London to Cotonau as the cars is 1998 model, its costing £550 aasat this time, I have been doing this for some time now so I know what II'mtalking about, its good for biz as RHD cars in the UK are very cheap ie £1100-£1500 for a VW passat 1997-1999 Manual/Auto, at the moment its costing too much to buy the Dashboard in Nigeria for the convertion, cost of clearing at the Port of Cotonau is 500k CEFAS aprapprox00 or 130K naira, and roughly40K to cross it into Nigeria, if you get an 8yrs old car or less than that age into Nigeria you looking at 220K-250K to clear it at Lagos port, Thats correct facts by guys, well back to my old request, any guys wanna do Dashboard biz, dontdon'titate to contact me one love |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by Jafour: 3:13pm On Mar 17, 2008 |
Dear Erico2k2 Please list the cars dashboard that you are interested in. Presently, I have a left hand drive 2000 Toyota Camry dashboard for sale. You may wish to contact me in Canada on 6479893275, e-mail bellin_int@yahoo.ca or contact Saheed in Nigeria on 08056261318. |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by lordmassac(m): 4:37pm On Mar 17, 2008 |
That question you have to ask our nigerian  |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by seefar: 6:26pm On Mar 17, 2008 |
well i think the reason why imported goods are expensive is as a rsult of high cost of importation. Simple.  |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by hotshawlng(m): 6:53pm On Mar 17, 2008 |
d answer is simple: because they r imported. |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by akara(m): 7:24pm On Mar 17, 2008 |
Perhaps if the goods were made in Nigeria, they wouldn't be so expensive |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by ifyalways(f): 8:33pm On Mar 17, 2008 |
akara:lol. |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by Builder: 10:48pm On Mar 17, 2008 |
Ibo guys are fairly used cars, na only God know who go die first. |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by d1tha1: 12:21am On Mar 18, 2008 |
Wait, are u guys for real? Trying to analyse why imported goods are expensive in Naija using cost of IMPORTING SECOND HAND CARS ?    This question is POINTLESS as it doesn't apply to Nigeria alone: If a product is manufactured in a foreign country there's no way it can cost d same locally given transportation and other importation costs on the one hand, and the importing country's inflationary and exchange rate factors. For, e.g. until recently, UK customers paid a whole lot more for the Apple iPod in dollar terms BECAUSE the product is not produced in UK but imported from the US. ( So my man, imported goods are excessively expensive in Nigeria SIMPLY BECAUSE they ARE imported and their costs are subject to the inflationary pressures in Nigeria. Of course, the higher the inflationary pressure in the domestic economy, the more excessive the price disparity will appear to be; which is why Nigeria's case may SEEM excessive(-there's your answer. Someone said it is because Nigerians have high profit motive laughable ) Simple economics of international trade, purchasing power parity, and comparative price advantage, and macroeconomics (wait, , no, its actually not that simple )i come in peace  |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by omoovie(f): 12:37am On Mar 18, 2008 |
Sorry to say but it's because there is a very strong demand for everything foreign in Naija. Think about it. How many people if they can afford Kelloggs will buy our "kwashiokor" cornflakes. (I'm using a term I've heard adhered to the naija brand of cornflakes we have). Once "Jando" is attached to any product whatsoever be it makeup to jewelry, plastic cup to dustbin Naija peeps will pay serious pepper for it because that mentality of "west is better" is deeply inculcated in our society and our psyche. Plus the sad fact is, so few people pay attention to the field of manufacturing and product design/packaging in Naija that even if you are getting the same product - 1 teaspoon shea butter wrapped in tin and stamped with L'occitane ($15) versus 1 kg shea butter wrapped in paperbag and sold at Ikorodu market (N200) you will cough up that $15 but be pricing that N200 because of what, the packaging. The west is good at packaging and presenting the exact same products, 99% of which are "borrowed" from "third-world" countries and selling in back to the people that created those products. |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by crazylegs(m): 9:28am On Mar 18, 2008 |
Great post. You've hit on something that should be obvious, but somehow most people are not aware of: There is big money in trading (importing and exporting, clearing, forwarding and backwarding, etc. ) Whether its in used cars or new clothes from China (Bulk importation of shirts from China is BIG Business. Those "cheap" N700-N1k shirts in the market actually have a total cost of like N200. The reason they are so expensive here is that its a relatively well-kept secret amongst traders. You import something for Personally, if I want something: from a laptop to a "tokunbo" car I've realised the best thing is to get it myself. You just need a close relative (or very tight pal) overseas and a "friend" in customs. You save a lot and if more people do it the price of imported goods should be forced down to the correct market price. Its a bit stressful though (worrying, calling, tipping and harassing). The overhead is a bit more than what the original poster listed. Everyone has a bit of stress so I guess thats why the traders charge so much on top and why some people just buy the damn thing here without all the wahala. I wouldn't do it for a living because I'd feel a bit guilty about the mark-up. But if I did, I think I'd make a lot of money. |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by crazylegs(m): 9:30am On Mar 18, 2008 |
*Repeated post* sorry oh. Great post. You've hit on something that should be obvious, but somehow most people are not aware of: There is big money in trading (importing and exporting, clearing, forwarding and backwarding, etc. ) Whether its in used cars or new clothes from China (Bulk importation of shirts from China is BIG Business. Those "cheap" N700-N1k shirts in the market actually have a total cost of like N200. The reason they are so expensive here is that its a relatively well-kept secret amongst traders. You import something for Personally, if I want something: from a laptop to a "tokunbo" car I've realised the best thing is to get it myself. You just need a close relative (or very tight pal) overseas and a "friend" in customs. You save a lot and if more people do it the price of imported goods should be forced down to the correct market price. Its a bit stressful though (worrying, calling, tipping and harassing). The overhead is a bit more than what the original poster listed. Everyone has a bit of stress so I guess thats why the traders charge so much on top and why some people just buy the damn thing here without all the wahala. I wouldn't do it for a living because I'd feel a bit guilty about the mark-up. But if I did, I think I'd make a lot of money. |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by mystikal(m): 11:32am On Mar 18, 2008 |
U guys ever heard of the word "dumping"? imported goods can sell at less than the price of same good in the domestic country, its possible! |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by choco4life(m): 12:10pm On Mar 18, 2008 |
I think guys are just desperate to make more bucks, simple |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by jookco(m): 12:50pm On Mar 18, 2008 |
well, don't use uk cars as an example because those cars are very cheap and we don't need right hand in Nigeria, well in Germany here the babyboy cost 5,500 Euro to 6,000 which is already more than one Million Naira, and the shipping is 600 Euro and clearing 2000 Thousand Naira so the different is just Two Hundred Thousand Naira , excluding phones calls stress and everything then just say the dealers are making 150,000 out of it . |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by TmeD0(m): 2:36pm On Mar 18, 2008 |
omoovie:I couldn't agree more! You hit the nail right on the head. All these economics rants is secondary as far as I'm concerned. It starts with the society's (Naija's) perception of locally produced goods compared to foreign products. In addition, if yeye gofment no too dey chop money but encourage manufacturing on a very large scale by awarding grants and fianancial assistance to deserving firms (I'm not talking about awarding contracts and grants to family members here o), maybe just maybe we might be able to start producing most of these "tokunbo" products and services at home. Peace! |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by omoovie(f): 3:23pm On Mar 18, 2008 |
T@meD0: Na true word u talk my broda! If dem go gree subsidise or give special grants to those wey go put in the effort to manufacture in an environmentally and economically sound way, peeps go do am! It's not rocket science (as my uncle used to say). Shoo! If dem gi me grant I go leave jando go Naija become farmer! Wetin I dey do 4 here? Burger morning! Burger afternoon! Burger evening! Nonsense! |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by erico2k2(m): 4:02pm On Mar 18, 2008 |
Dear Jafour The list of cars Dashboard, I'm looking for includes, VW passat1997-2000,Rover 75.1998-2000,Rover600 1997-1999, BMW 3series,1995-1998 ,Honda accord V tec 1997-1999. Thanks. |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by d1tha1: 10:31pm On Mar 18, 2008 |
T@meDo, All this your ‘righteous’ talk about Nigerian’s perception of foreign goods is hogwash. Fact: foreign goods are generally of a much higher quality than made in Naija goods (make u try super blue Omo and then try imported Persil, make u tell me d one u prefer ). It is just human nature to desire what is better for whatever reasons even if it is just to keep up with d Jones’. Desire for betterment and improvement is at the core of preference for higher quality over lower quality and this isn’t peculiar to Naija so I don’t know what u r talking about. Moreover, even basic goods that are considered essential to life, e.g. cars, tvs, generators, electronics,etc, are not even produced in Nigeria so u cant even big to talk of change in perception when in most cases there is no locally produced alternative . Face it: Nigerians are “slaves” to imported goods and their high costs. sadly so  Change perception ke? |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by naijaway(m): 11:11pm On Mar 18, 2008 |
95% of materialistic things in naija are imported and that's my estimate. Very sad for a nation where everyone thinks they know alot. Is because of too much bragging and no inspiration to work together coupled with the lack of basic infrastructure needs and many more. Those countries we import from were at one point in their history lacking all their stuffs today but the differece btw us and them is dat they persisted and made it a success through trials and errors. Is only right we suffer the brunch of our incompetence and the ignorance/ lack of vision that encompasses most of the nation be it in accountability, infrastructure, knowledge, dedication, patriotism, relationship with other nations in Africa and in diaspora etc. Is until we are ranked the 53rd out of 54th in African economy that we would be able to sit up and I still doubt it cuz they will be something to blame it on. Nevertheless, MAY GOD DELIVER NIGERIANS AND AFRICANS AT LARGE FROM THE DESTRUCTION OF IGNORANCE. |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by babamutu: 9:50am On Mar 19, 2008 |
Tell me why wont things be expensive when the FG banned many things without a better alternative. For instance textile was banned without putting in consideration on how to service more than 130million people in the country so when those things are smugled in after paying double or even more to those poeple that bnned the goods (FG through customs) at the border, the goods will have no alternative than to be expensive. I strongly feel that that some policies made are for the personal intrest of some selected few while the poor masses suffers and still smiles, |
| Re: Why Are Imported Goods Excessively Expensive In Nigeria? by TmeD0(m): 8:00pm On Mar 19, 2008 |
omoovie: Abi o my sister. Country wey get abundant natural resources like that and people still no fit chop belefull. I go follow you farm too o if dem go fit award the grant to people that are willing and can do the job. But no, na so so chop make I chop we know for Naija. Farming for obodo America hia na lucrative profession o. The same products and services that our people they waste money buy (because na from "overseas" can be produced at home if only the gofment go provide incentives for people to produce. Chei! the thing dey always pain me o, just the thought that Naija could be a great nation in Africa. Potential plenty yanfu yanfu o. Peace! |
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