Nigeria 2010 vehicle imports drop 18 pct on weak credit

New vehicle imports into Nigeria declined 18 percent in 2010, reflecting weak credit growth in sub-Saharan Africa's second-biggest economy in the wake of a $4 billion bank bailout the previous year.

Vehicle sales in Africa's most-populous nation are a proxy measure for private purchasing power, a leading economic indicator which is not formally available in Nigeria.

Port figures showed new vehicle imports fell to 36,606 units in the twelve months to December, compared to 44,757 units in 2009, according to Mohan Sethi, general manager at Dana Motors, which imports Kia vehicles to Nigeria.

Banks in Africa's top oil producer tightened lending in the wake of the 2009 banking crisis and credit flows have yet to fully recover.

Credit to the private sector grew just 3.2 percent by the end of November from the start of the year, compared to 22 percent growth in 2009 as a whole and 48 percent growth in 2008, according to the latest central bank figures.

Nigeria has established a state-run asset management company (AMCON) to absorb bad loans from banks in a bid to clean up their balance sheets and enable them to start lending again.

AMCON said in December it had issued bonds worth 1.03 trillion naira to 21 lenders in exchange for non-performing loans and expects to clear up remaining bad loans by March 31.

It plans to issue an additional 500 billion naira in bonds.

Dealers had expected car imports to fall 20 percent in 2010.

Industry sources put the market size for used vehicles sold in Nigeria at 200,000 per annum and say the market has remained broadly stable because of its competitive pricing.