Nigerian Car Loan Issues

There has been a lot of talk recently about the car loans that President Olusegun Obasanjo had granted military officers in his administration. Originally it was set up so that the federal government was supposed to pay half of their car loans, but as he begins to make plans to leave, that amount has suddenly grown to 70% payable by the officers.

About three years ago, the president had announced that he wanted to bring back some of the perks that officers in the Nigerian Armed Forces that they used to get back when he was an Army officer. One of the things the government did for them was to give them auto loans – which officers readily accepted. He promised that the government would pay half and they would pay the remaining half on the car loans.

The car loans were for mostly Peugeot cars, and they were distributed among the officers, and it was agreed that 30% of their salaries over the next five years would go to paying off the car loans. The officers ended up giving anywhere from N30,000 to N50,000 towards the cost of the car loans so far – and the amount depended on their ranking. However, there are only about two years remaining on the auto loans, and only about 15% of the officers have got allocation of the cars.

In addition, another 20% has been deducted from the 50% payment promised by the administration, so that the officers now have to pay 70%. The administration said that the extra amount of car loan money was actually for auto insurance, registration, and other various fees. However, the majority of cars have not been registered, so how could there be fees due?

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