BREAKING NEWS, Business
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The Nigerian government is to review the 2013 automobile policy introduced by the previous administration of former president Goodluck Jonathan just as about 20 firms are in the process of setting up vehicles assembly plants in the country
| By Anayo Ezugwu | Jul 4, 2016 @ 01:00 GMT |
THE federal government is to review the 2013 automotive policy introduced by former President Goodluck Jonathan. This will help to set up an effective implementation framework and incorporate a number of suggestions offered by local automakers and other stakeholders.
This action of government has put to rest speculations about the disposition of the President Muhammadu Buhari-led administration over the automotive policy programme. At a one-day stakeholders’ forum on the Nigerian automotive policy, Okechukwu Enelamah, minister of industry, trade and investment, said: “We are working with the stakeholders to achieve results. Going forward, government will come up with responses to the issues that were raised by the stakeholders in the forum. We will review the existing policy in line with all the issues raised at the forum.”
The minister said the government was working on several initiatives aimed at creating the right operating environment, adding that there would be increased tax incentives. “Government is working on engaging banks and other financiers to act as technical partners both in Nigeria and outside Nigeria to provide funding for operators. Nigeria will also leverage technology to fight smuggling of used cars across the border,” he said.
The event was attended by managing directors of many major auto companies, who expressed worry at the influx of used vehicles into the country, and urged the government to increase the import tariff as a way of discouraging their importation.
In a presentation, Aminu Jalal, director-general, National Automotive Industry Development Plan, said the policy was launched in 2013 with very clear fiscal guidelines and programmes to run initially for 10 years, with periodic properly phased reviews. He said: “Its main objective is to bring back vehicle assembly operations and develop local content.
“To gain investors’ confidence, additional effort was made to legislate and it passed through both houses successfully as a package of incentives. Since the approval of the policy in October 2013, the 14 existing assembly plants and body builders, which were on the verge of closure, had a new lease of life and obtained or renewed technical partnership agreements with global OEMs.”
Jalal added that more than 20 other auto firms had either commenced or were in the process of starting the assembly of vehicles in Nigeria.
Supporting, stakeholders in the local automotive industry have called on the federal government to increase tariff on used cars in order to encourage the growth of the local industry. Thomas Pelletier, managing director, CFAO Automotive Equipment and Services Nigeria Limited, advised the government to make customs duty for used cars at par with the one charged for new cars, adding there should be a ban on the importation of cars through the land borders as 70 per cent of used cars in Nigeria come through them.
Cosmas Maduka, president, Coscharis Group, also called on the government to impose higher duty on used cars than new ones, lamenting the poor implementation of the policy by the former administration. Ibrahim Boyi, managing director, Peugeot Automobile Nigeria, also called for a ban on the importation of used cars, adding that this would aid local production.
The auto policy, which was introduced to encourage auto firms to set up assembly firms in Nigeria. The then federal government planned to spend $78 million on land, purchase total investment in equipments for the automobile industry and also lease an assembly space for $250 000 per annum or N50 Million on the average.
A total of 37 companies got licences to begin operation but not all are fully equipped to put together commercial vehicles due lack of funding but government allowed such companies to remain under contracts with fully established assemblers until they are able to build their own plants.
Prior to the policy commencement, in 2013, Nigeria imported 100,000 new vehicles and 300,000 used vehicles valued at over $550 billion. Currently, more than 30 original equipment manufacturers have started production and some of them have started establishing assembly plants. The Nigerian automotive industry at full capacity has the potential to create 70,000 skilled and semi-skilled jobs along with 210,000 indirect jobs in the Small Medium Enterprise, SMES.
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