‘Review of tariff in Finance Bill will kill Nigeria’s auto Industry’ | Dailytrust

‘Review of tariff in Finance Bill will kill Nigeria’s auto Industry’

The Federal government’s approval for the reduction of tariff on importation of vehicles in the 2020 finance bill “is a policy summersault capable of killing Nigeria’s automobile industry.”

This was the concern raised by automotive manufacturers and Peugeot Automobile Nigeria Limited (PAN) at a press briefing held in Abuja.

PAN Chairman, Ahmed Wadada Aliyu, stated that the minister of Finance, Zainab Ahmed, was misled with wrong statistics that eventually led to the decision to review the tariff.

“When the National Automotive Manufacturers Association (NAMA), discovered that a tariff has been inserted in the 2020 finance bill, a meeting was called by the office of the vice president in which NAMA was in attendance.

“It was agreed at the meeting that NAMA should put up a complimentary presentation on the need of the Automotive Manufacturers with regard to capacity for effective performance.

“We are, however, shocked to learn that the 2020 finance bill has been approved,’’ Aliyu said.

He, however, maintained that the tariff review will become more detrimental, adding that it could eventually lead to the total collapse of the Nigeria Automotive industry, thereby placing other African countries as the new hub of automotive activities within the ECOWAS sub-region.

“Under the National Industry Development Plan (NAIDP), the import duties and levy on Fully Built Units (FBU) at 35% was to discourage imports and encourage imports of SKD for the local assembly of vehicles at 10%.

“The extent tariff regime recognizes that government must support the development of automotive capabilities, but we are now faced with disincentives for investments in the automotive sector with the review of tariffs in the 2020 Finance Bill.

“The implication of these spells the imminent death of all Auto Assembly plants.

“From the above, imports duty rates on Semi Knocked Down (SKD) kits for tractors and stands at 10% while FBU tractors now attract a 5% duty rate, thereby discouraging local assembly of tractors, who are presently 14 companies in number.

“The same goes for SKD kits for motor vehicles (cars), with no disparity in rates between SKD and FBU vehicles.”

He added that with the tariff reduction, “Nigeria will not be able to compete in the AFCTA trade in the region and become a dumping ground for vehicles, especially with Ghana being poised already as the likely automotive hub of the region.

“There is also  imminent closure of the 54 assembling plants in Nigeria with a total of installed capacity of 471,690 units per annum and loss of over 6000 jobs.”

He appealed to President Muhammadu Buhari to, as a matter of urgency, reverse the review.