- We’ve ramped up local capacity – NADDC
The directive by the Federal Government for its officials to buy Made-in-Nigeria vehicles has been described as a positive development that would transform the automobile sector in Nigeria.
President Muhammadu Buhari had at the recent 26th Nigerian Economic Summit in Abuja said all MDAs have been directed to buy only made in Nigeria vehicles especially for the coming year.
Manufacturers especially hail the initiative which they believe would bring about return on their investment and ultimately propel the country’s economic development.
The Federal Government had recognized 58 companies including those privatized by the Bureau of Public Enterprises (BPE) as automotive assemblers in full compliance with local content guidelines under the National Automotive Industry Development Plan (NAIDP) 2017/18.
The programme birthed the technical partnership agreement between registered Assembly Plants (APs) and Original Equipment Manufacturers (OEMs) with the endorsement of the National Automotive Design and Development Council (NADDC).
Daily Trust gathered that the technical partnership culminated in the cumulative investment commitment of $756m or N264 billion made by the local assemblers in five years of implementation of the NAIDP.
Figures available from NADDC show that of a total installed capacity of 388,000 vehicles per annum in 2017, only 6,690 vehicles or 1.7% capacity was achieved.
Many automotive practitioners including Elizade, Coscharis, KIA, Peugeot, SCOA, Honda, CFAO Mitsubishi, Dangote Peugeot, Innoson Nissan, Dangote Sino-truck, Kia, TATA and a host of others have all invested and continue to invest in billions of naira in assembling activities.
For instance, a research on “Zero Patronage, Zero Tariff and the Redefinition of Patriotism by Nigeria’s Automobile Industry” conducted by an automotive expert, Dr. Oscar Odibo showed that 40 vehicle assembly plants operating in the country in the last five years churned out 15,000 units of vehicles from cumulative capacity of 450,000 vehicles.
The research also showed that from an average cumulative annual capacity of 90,000 vehicles, the annual output for all the plants are 375 vehicles. Stakeholders say absence of patronage, access to credit as well as the absence of a simplified vehicle financing scheme have made it difficult for local assemblers to achieve up to five per cent of their installed capacities.
But with the new development, manufacturers say the capacity of the local assemblers would be increased in addition to creating more jobs for the people.
The chairman, Motor Vehicles and Miscellaneous Assembly Sectoral Group of the Manufacturers Association of Nigeria (MAN), Dr. David Obi hailed the development, saying the government must walk its talk and ensure the directive is well implemented.
He said if the government which is the biggest spender does not patronize the local manufacturers, it would be difficult for them to survive. He stated that by patronizing the local assemblers, they would encourage them to produce more, create more jobs for the people.
He said, “A country that must survive must start looking inward by patronizing their vehicles. If you go to China, how many foreign vehicles would you see? They have been looking inwards and that is why they are now number two in the automobile world. So let us be realistic. Government must live by example. You can be asking people to be patriotic if you are not practicing it.
On his part, the Chairman of Innoson Group, Dr. Innocent Chukwuma, commended the Federal Government for restating its commitment to buying only locally produced vehicles and discontinuing the patronage of imported fully built up options.
He said Innoson Vehicle Manufacturing Company Limited {IVM}, Nnewi, and other genuine auto factories in Nigeria have the installed capacity to produce passenger cars, light commercial vehicles, high capacity buses and special purpose {utility} vehicles, to satisfy local needs, if adequately encouraged.
Chukwuma stated that the move by the Federal Government, as contained in the 2020 Finance Bill, is in line with the yearnings of the local auto makers who have consistently called for a conducive operating environment, and promotion of their products.
“I received with gladness the news of the pronouncement by President Muhammadu Buhari, through Vice President Osinbajo, at the 26th Nigerian Economic Summit Group Conference, that the government is committing itself to the patronage of our vehicles. This is a move in the right direction.
“I am aware that this is not the first time the government is making this kind of declaration. Even the previous administration had a similar policy. But, all stakeholders are hopeful that the policy will be implemented more seriously this time.”
Chukwuma, however, insists that the Federal Government’s plan to reduce the import duties and levies on buses, tractors and other motor vehicles as contained in the proposed 2020 Finance Bill will be a huge disincentive to investments, and should be reversed.
A former acting Director-General of the NADDC, Mr. Mamudu Luqman in a chat with our correspondent said the directive is in line with the public procurement act which “already provides for patronage of all made in Nigeria goods including locally assembled automobiles in filling contracts.”
He said, “However, goods can be imported to fulfill contracts where there is no local capacity. I see the directive as a reinforcement of this provision. Right now, the Bureau of Public Procurement will not issue a certificate of no objection for a contract to purchase automobiles in Nigeria if the supplier is not on the accredited list.
“To get accreditation, the assembler applies to NADDC. A team composed of officials of BPP, NADDC and SON then undertakes an on the spot inspection of the facility in action. If satisfied, a report jointly endorsed by all will direct update of register with the successful applicants’ assembler.
“I think there is a need for vigilance. Those spreading false statistics to indicate that Nigeria automotive sector has no capacity to satisfy demand for new automobiles, don’t mean well for this nation. Even then, it’s not an excuse to remove protective measures for our industries.”
Commenting on the strength of the local auto industry, the leadership of NADDC said it is committed to the vision of President Muhammadu Buhari to make Nigeria the hub for automotive development in Africa.
The Director General of NADDC, Mr. Jelani Aliyu, said current capacity for local vehicle production have been ramped up to address domestic demands, while manufacturers including Honda, Peugeot, Innoson, Mitsubishi amongst others have created thousands of jobs for Nigerians within the period,
Mr Aliyu said the Council under his leadership has attracted over $1 billion investments into the auto sector in Nigeria, has introduced a N5 billion Vehicle Finance Scheme for Nigerians and more than 15,000 made in Nigeria vehicles sold in 2019 alone.
Data sourced from NADDC show that Nigerians spent over $8 billion annually for the importation of used vehicles into the country.
The NADDC boss said its Vehicle Finance Scheme would require that only 10 per cent of vehicle value will be put down when buying a new vehicle, while the over $8bn import bill would have been reduced.
The NADDC boss further told participants at the 38th National Solar Energy Forum, 2020 (NASEF 2020) in Sokoto, that the Council is working with three universities to develop electric vehicles.
He said the universities are the University of Nigeria, Nsukka in Enugu; the University of Lagos, and the Usman DanFodio University, Sokoto which are working with NADDC on Electric Vehicle Technology Transfer, a pilot programme.
He said the collaboration will help to further understand the challenges, opportunities and strategies for the production of electric vehicles in the country.
“We shall deploy Electric Vehicles at these three institutions and collaborate with them in Monitoring and Evaluation so as to gather the necessary empirical data needed to develop an Electric Vehicle Policy,” he said.
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