Luqman Mamudu is a Nigerian automotive development expert and former Director of Policy and Planning at the National Automotive Design and Development Council (NADDC).
In this interview, he speaks on the status of the Nigeria Automotive Industry Development Programme (NAIDP) 2014-2024 as it comes to a close.
Have we really made any meaningful achievement in the Nigerian automotive industry this past 10 years considering that critical pillars of NAIDP were either abandoned or never implemented. I am particular about the investor confidence bill or NAIDP policy bill?
We certainly made considerable progress in the industry. For one, 90% of the manufacturing and assembly companies established in Nigeria’s first automotive programme were revived. Note, my word, revived not revitalised because they still have not reached their full potential in capacity utilisation. Established between the 70s and early 80s, their combined capacities met 70% of Nigeria automotive needs.
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Secondly, the NAIDP through its robust fiscal provisions resulted in an investment pipeline through technical partnership and their Nigerian brand distributors, dealers and just entrepreneurs.
The result was an upsurge in installed capacity from a mere 5,000 units to about 450,000 units per annum. The plants include Peugeot Automobile of Nigeria (now PAN NIGERIA), VWON NIGERIA (now Stallion) FIAT NTM (Now NTM), ANAMMCO, and Steyre, Nissan, Yutong buses, Ford, Kia, MAN Trucks, Hyudai, Sinotruck, and more.
In fact, some OEMs (Original Equipment Manufacturers) like HONDA, have set up assembly operations directly. Many local entrepreneurs led by Innoson Motors Manufacturing (IVM) also set up robust manufacturing and assembly operations. Others within this space include OMAA, Jetvan Automobile Motors.
As said earlier, installed capacity by 960% per annum. These all happened within 4 years of NAIDP tenure in 2017.
What’s your take on the N20bn auto finance scheme through the CreditCorp being launched by the federal government?
Yes! It is a very welcome development as it revisits one of the key pillars of NAIDP. The establishment and appointment of Board of Consumer Credit Corporation (CREDITCORP) as a credit access to all Nigeria consumers is a welcome development. Generally, such an institution is key as an inclusiveness policy and will benefit everyone including the Nigeria Automotive assemblers, especially if it leads to increased demand for their products.
I note that the NADDC may have leveraged its platform to launch targeted N20b funds for local automotive manufacturing companies only. I believe, it is an attempt to resuscitate one of the game changing inbuilt programmes of NAIDP long abandoned. If well funded and implemented, the Nigeria Automotive industry is in good times. Let me mention here that one of the key achievements of NAIDP was the collaboration of NADDC and Equipment Leasing Company of Nigeria (ELAN) to push for the total reform of leasing law in Nigeria. This will impact the access of CREDITCORP resources positively.
Again, we seem to be shifting attention away from electric vehicles with our focus on the CNG, how can we really marry the two, so that we can equally meet the global electrification target and contribute to reducing carbon emissions?
That shouldn’t really be a challenge. The present government has chosen to pursue CNG as a route to achieving carbon emissions reduction. Fine! This is good as long as appropriate resources are well targeted to the industry or stakeholders.
However, I believe it is best to encourage existing and prospective automotive assembly plants to install lines to build new CNG propelled new automobiles rather than rekitting.
Such vehicles will have more engineering integrity than rekitted ones. Rekitting should be limited to short term measure for used vehicles only.
On the other hand, electric vehicles technology agenda can be pursued alongside global adoption pushed by technology and government policies/ regulations. Nigeria can meet its overall emission reduction targets faster with added gains from ongoing CNG programs. Nigeria should launch a policy framework for automotive vehicle electrification in the NAIDP 2, which I learnt is being processed by NADDC.
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