‘Nigeria may lose out as auto investment destination’

A Managing Partner of Transtech Industrial Consulting, Mr Luqman Mamudu, has said a new auto policy can be ready in one week if the government is serious and noted that time is running out as Nigeria’s position as an automotive investment destination is being threatened by the absence of a robust auto policy.

At a time the federal government said a draft of the new auto policy was ready and would be sent to the National Assembly before the end of the first quarter of 2021.

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However, speaking on this, Mamudu who is a former Director of Policy at the National Automotive Design and Development Council (NADDC), wondered how the draft was prepared.

He said, “Anything short of amending the technical errors in the National Automotive Industry Development Plan (NAIDP) bill that was returned by the president unsigned will be counterproductive.

“Ordinarily, these amendments shouldn’t take more than a week to sort out. More than six months after the bill was returned unsigned, we are still told that a draft will be ready in three months’ time.”

The automotive industry expert said the problem with NAIDP was that it had not been properly implemented.

He said, “The critical one which is the game changer is the automotive credit purchase scheme which will enable Nigerians buy automobiles produced by Nigerian assemblers.

“Nobody buys automobiles in cash these days. It is no longer fashionable. It is driving corruption in Nigeria. The others are the test centres and automotive suppliers’ park for components and parts development. These projects have all been abandoned and nobody is asking any question.”

He explained that South Africa, Morocco and Egypt were already there at various levels of progress, while Ghana was warming up, noting that if Nigeria delayed further, the countries would take advantage of its huge market.

He further said, “Government can do it if it will ignore pressure from traders who are just interested in profit. They do not have to call it NAIDP. The objective of NAIDP is to renew vehicle stock in Nigeria by Nigerians through assembly and components manufacturing.

“The NAIDP has no levy on all imported second hand vehicles, and removing the levy on cars will not affect its price. Of course it will benefit importer traders of commercial second hand vehicles for which Nigeria has demonstrated capacity even without NAIDP. The traders will just adjust for their loss due to fall in the naira exchange value.”

He noted that Nigeria was fully established as an automotive body building entity and that companies like IPI Arewa Metal, Gorgeous Metal Kaduna, Innoson and ANNAMCO were long established body builders.

He, therefore, recommended that, “Now you say anybody can import Fully Built Units (FBU) at five per cent duty.

“It is ridiculous. If the intention is to reduce the cost of transportation, this is not the best way.

“Give Nigerians – fleet operators and the bus operators – cheap intervention funds so they can acquire brand new vehicles and pay over six or seven years, and the cost of transportation will drop overnight.”