Category: Industry

Nigeria boasts of bountiful exportable agricultural and mineral resources to enhance her continental and global competitiveness in trade. The snag is that most, if not all the resources, are exported in their raw form, without any value addition.This erodes her competitiveness and hurts efforts at job creation and industrialisation. But, with the coming into force of the African Continental Free Trade Area (AfCFTA) agreement, a strategic refocus on value addition has become imperative for Nigeria to maximise its benefits. Experts, however, say this will require massive investment in processing facilities and technology. Assistant Editor CHIKODI OKEREOCHA reports

It is easy to see why manufacturers’ advocacy has shifted to adding value to raw materials for export. For one, it is borne out of the realisation that the era of exporting mineral resources in their raw form must give way to value addition.

The consensus is that value addition is critical to giving the manufacturing sector more traction and enhancing its contribution to the  Gross Domestic Product GDP), which stands at less than nine per cent.

Also, the renewed focus on value additions to exports, according to experts, is one of the sure ways to manufacturers’, and by extension, Nigeria’s competitiveness at the continental and global marketplace.

The President, Manufacturers Association of Nigeria (MAN), Mansur Ahmed, said: “It is our view that for Africa – and certainly Nigeria – to achieve beneficial free trade, we must significantly improve the value-chain in our manufacturing sector.

“This is the most assured route to achieving competitiveness, enhancing job creation and lifting the vast majority of our people out of poverty.”

That was at the 47th Annual General Meeting (AGM) of MAN held in Lagos. It was aptly themed “Improving the value chain in the manufacturing sector for competitiveness and job creation.”

Mansur, an engineer, said the theme was intended to direct attention to the need for a robust manufacturing production agenda – an agenda that supports the vision of intra-African trade for the free movement of goods and services made in Africa.

Quoting President Muhammadu Buhari, he said the vision of intra-African trade for the free movement of goods and services made- in-Africa means “Goods and services made locally with predominately African content in terms of materials and value addition.”

The MAN chief, who has never hidden the association’s intention to focus on value-addition, as well as improve the technology deployed in factories, has continued to emphasise that “Value addition is the key to success in manufacturing’’.

Why value addition is imperative

Including value additions to exports is acknowledged as holding the key to Nigeria’s maximising the full benefits of the African Continental Free Trade Area (AfCFTA) agreement. The trade liberalisation deal is expected to push immense possibilities to the hands of manufacturers.

For one, manufacturers stand to earn more income from adding value to raw materials before export. This will be a clean break from the arrangement where manufacturers are focused on proceeds they get from exporting raw materials and in the process losing billions of dollars from by-passing value addition to these products.

The Nigerian Export-Import Bank (NEXIM) put this unfortunate scenario in perspective. The bank, using cocoa as a case study, said, in its report, that Africa accounts for over 70 per cent of the global cocoa production, with Nigeria as one of its key producers.

The report put the global value of raw cocoa export at $10 billion, while the total value of all finished goods from cocoa is $200 billion yearly, with chocolates alone amounting to $100 billion.

The report shows that Africa accounts for 73 per cent of global cocoa production, but enjoys less than five percent of the wealth in the cocoa value chain.

This situation is worse for Nigeria, which, despite parading about 24 states that fall under what is described as ‘Nigeria’s Cocoa Belt’has no vibrant chocolate industry to process cocoa into chocolate and other finished products.

The Nation learnt that 90 per cent of chocolate products in the Nigerian market are imported from Europe and African countries, such as Ghana, Cote d’Ivoire and South Africa. There are few processing firms with the capacity to process cocoa into chocolate in Africa’s largest economy.

Inadequate cocoa processing firms is said to be the reason persistent calls by experts for Nigeria to produce chocolates instead of exporting raw beans have failed to yield the desired result. According to experts, cocoa processing factories generate between $90 million and $400 million yearly, even at their low capacity rates.

This is why they have continued to urge Nigerians to give more priority to processing instead of exporting raw cocoa beans.

Unfortunately, issues, such as regular supply of cocoa, capital to establish local processing plants, and the challenge of marketability viz-a-viz imported chocolate, among others, have continued to pose serious obstacles to the emergence of a vibrant local chocolate industry.

Nigeria’s leather industry is also suffering a similar fate because of lack of value addition. For instance, the former Minister of Science and Technology, Dr. Ogbonnaya Onu, projected that the Nigerian leather industry could reach about $900 million in export in the future.

The minister, however, said this could only be possible if value addition is intertwined with the export process.

Indeed, virtually, all the basic raw materials to feed the industries are available. The snag, however, is that they are not available in sufficient quantity and quality. Most of the available local raw materials are said to be in unusable form, requiring value addition before they can be used by industries.

The value addition is done mostly by Small and Medium Enterprises (SMEs), because they are the off-takers, taking the materials from the unusable form to the next intermediate stage. It is the intermediate raw material that industries require.

However, because of the low capacity of the SMEs to add value to available local raw materials, coupled with lack of access to capital to set up processing facilities, process technology and techniques, and spare parts, among others, they have not been able to fill the gap.

This explains why most of the local raw materials are exported for processing and later imported  into the country as finished products, with the addition of certain additives at great cost.

By exporting most of the materials, if not all of them, in their raw form, without any value addition, manufacturers and Nigeria end up losing money that could have been made from finished products produced locally.

More importantly, the country creates jobs for nationals in other parts of the world, while she continues to grapple with unsavoury socio-economic consequences of rising unemployment particularly, among graduates.

Investments in technology, infrastructure key

Despite manufacturers’ renewed focus on incorporating value addition to exports to gain competitive edge, it will not be a walk in the park. Substantial investments in basic utilities, especially infrastructure, are required.

Mansur said infrastructure is one of the main components of a successful manufacturing sector hence,major investments should be made in infrastructure. He also said there is need for manufacturers to constantly update themselves on global trends, especially in the technological and digital aspects.

Experts also said as manufacturers and the country gear up to take advantage of AfCFTA, they must not ignore the role of Research and Development (R&D) in the drive for competitiveness.

According to them, most of the technologies required to reduce poverty, add value to natural resources, and upgrade the technological proficiency of local industry have already been invented.

What manufacturers and government need to do is to develop the capacity to use technologies, which requires developing engineering, technical and vocational skills rather than conducting frontier-level R&D.

Experts also advised that there should be collaborations between government agencies, investors and industries to enhance productivity and innovations in the manufacturing space, adding that a special intervention fund is also required to support processors for asset acquisition and working capital.

 Sam Ibok

A professor of Fishery University of Calabar, Sunday Ben Ekanem, has urged the government not to underestimate the contributions of fishery to the economy. He sought more recognition from government across all cadres  to the input of fishery with respect to employment, income generation, poverty alleviation and foreign exchange earnings.

Ekanem made this known during the institution’s 89th inaugural lecture, which he delivered at the university’s International Conference Centre, with the theme: ‘Fish as it is no more commons’.

Ekanem maintained that the importance of fishes to the economy is indicated by its contribution of 5.4 per cent to the Gross Domestic Product (GDP).

According to him, about 10 million Nigerians are engaged in fisheries. This ranges from fish folks, fish farmers, fish processers, marketers, operators on board industrial fishing boats, terminal/jetty operators and net fabricators and menders, as well as engine repairs and fitters.

He said Nigerian shrimp is considered one of the best in the world, generating over $50 million yearly.

The inaugural lecturer stated that fish contributes immensely to the enhancement of healthy living, adding that aside protein for body building, fish contains omega 3 fatty acid that reduces the risk of cardio-vascular diseases and hypertension. Aside, Omega 3 fatty acid is also responsible for proper development of brain cells in developing foetus.

Ekanem said fish is medically prescribed as preferred animal protein for 50 years age bracket and above.

He said fish is also ideal for pregnant women and young children for good health and mental development, while it also enhances high intelligent quotient in developing children.

He said consumption of Omega 3 fatty acid found in fish is said to reduce the likelihood of developing alzheimer disease.

He said fatty acid in tuna contributes to healthy brain and helps to postpone cognitive decline in elderly people as well as reduce symptoms of depression.

Ekanem said fisheries is facing many serious challenges, which according to him, include overfishing, climate change and major environmental disturbances such as oil spill and other causes of pollution.

The challenges, he stressed, had acted together to limit production, especially in capture fisheries, adding that aquaculture has come to the rescue though not without its relative challenges.

The Vice Chancellor and chairman of the occasion, Prof Zana Akpagu, praised Ekanem on what he described as a ‘sumptuous intellectual feast’. He expressed gratitude to him for the pivotal role he had played in mentoring young ones who may eventually step into his shoes in the future.

By Omolara Akintoye

The Chairman, Ridersports Software Nigeria Limited, owner of Rider Lotto, a new entrant into the lottery business, Mr. Ola Omotosho, has said the objective for setting up the business is to promote transparency and empower families.

Speaking at the flag off of Rider Lotto in Ikeja, Lagos, Omotosho said the new lotto business was built on reputation, trust, integrity and transparency, stressing that these will form the bedrock for its dealings with the public.

The Ridersports chairman affirmed that the company was poised to change the face of lottery business in the country, pledging that the company would stick to international best practices and operate within the ambit of the law of the land.

Omotosho noted that the company is not new in the lottery business. According to him, it has established outlets in other parts of the country before berthing in Lagos with the sole intention of alleviating poverty.

“Our motive is to alleviate poverty through lottery… with a paltry N100, you can achieve your lifetime dream by winning a whopping N1 million guaranteed money and instant fortune,” he said.

He added that unlike most lotto operators, Rider was bent on affecting the lives of its customers positively as well as the society it operates in.

“At Rider Lotto, our price fund is 30 per cent of our takings; 20 per cent goes to good causes (corporate social responsibility) and 50 per centfor operation cost,” Omotosho explained.

He called on agents to partner the brand for a rewarding venture, adding that the process is not as cumbersome as obtainable elsewhere. “This is a golden opportunity to raise people out of poverty and improve their finances …” the chairman said.

The beauty of Rider Lotto is that it is played online and daily, and as a result, anyone can play from the comfort of his bedroom. The draws are also done live to prove its transparency and genuine nature.

Again, the games are played in a way where if there is no jackpot winner at the time of the draw, it will automatically roll over to the next week, and by so doing the jackpot price keeps increasing.

With a clear vision of becoming the biggest and most trusted lottery company in Africa, as well as create a platform for genuine lottery business with instant and prompt payouts, Ridersports lottery, according to Omotosho,” said.

The Osobia of Imakun Omi, Oba Kazeem Salami, unveiled the machine, after which Omotosho loaded it with magnetic balls in readiness for the first draw.

At the evnt were Regional Director (Africa), Ben TV and Executive Director, Rider Lottery, Mr. Lanre Ijaola; Director, Rider Lottery, Mrs Olakemi Omotosho; Dr. saheed Osupa, Yomi Fash Lanso, and Foluke Daramola.

By Ambrose Nnaji

Nigeria and the United States are collaborating to harness the potential of creative industry.

Areas of partnership are design, music, publishing, architecture, film and video, crafts, visual arts, fashion, television and radio.

The collaboration, which is expected to help strengthen regulations in the industry, also covers advertising, literature, computer games and the performing arts.

Chairman, Government and International Liaison Committee, Nigerian-American Chamber of Commerce (NACC), Dr. Ikenna Nwosu, made this known during the Chamber’s Breakfast Meeting in Lagos.

The meeting had as theme “Promoting creativity in the contemporary Nigerian talent industry: The challenge of sustainable intellectual property protection.”

Nwosu, who spoke on behalf of the President of the Chamber, Toyin Akomolafe, said the meeting and the collaboration offered them the opportunity to protect the intellectual property of Nigeria as well as American businesses in the country.

Nwosu said before now, the American Business Council, which is made up of American firms in Nigeria, had a forum also on intellectual property though focused on the pharmaceutical sector.

The Director-General (DG), Nigerian Copyright Commission (NCC), Mr. John Asein, identified some of the challenges confronting the commission to include poor funding weak infrastructure, low staff morale and inadequate skills sets, low level of public awareness on the importance of copyright and the creative industry.

Others are non-prioritisation of the creative industry as a component of the national economic agenda and inadequate policy and legal framework; inefficient rights management and enforcement systems.

He also said weak enforcement in the face of growing on/offline piracy, absence of a public-private synergy, as well as fragmentation in the copyright industry and lack of synergy with the Commission are issues.

Asein also listed gaps in economic policies; inadequate mainstreaming of intellectual property (IP) into national economic development agenda; absence of a comprehensive baseline study to show the contribution of the creative industry to the Gross Domestic Product (GDP) as challenges.

The NCC boss further noted that apart from inadequate office space, lack of operational vehicles was clogging the wheel of progress at the Commission.

According to him, there are less than 20 vehicles that could no longer support the Commission.

He, however, stated that the Commission remains committed to strengthening human and institutional capacity, improve policy and legal framework, enhance copyright awareness and education.

Asein also said the Commission will promote effective rights management, regulation and enforcement, ensure positive enforcement and diligent prosecution, and build linkages at national and international levels.

According to the DG, the Commission had ensured the execution of over 700 anti-piracy surveillance operations in piracy endemic areas, over 350 anti-piracy operations against book, software, broadcast and film piracy, and over 750 arrests of suspected pirates.

Others include the removal of over 9,308,612 assorted pirated copyright works with estimated market value of N9.5 billion, seizure of 20 shipping containers of pirated books, musical works and films at various seaports with the cooperation of the Nigerian Customs Service (NCS).

By Ambrose Nnaji

Mattress and other bedding products manufacturer, Mouka, has been endorsed by the Nigeria Association of Orthopaedic Manual Therapists (NAOMT) ahead of Mouka’s 60th anniversary.

The endorsement comes on the back of consistency in quality delivery and innovative mattress production, which have characterised the brand’s market path in Nigeria.

Its Chief Executive Officer, Raymond Murphy, said the company was the country’s champion of healthy sleep culture, an attribute its mattresses have consistently reflected in its 60 years of operating in the mattress and bedding industry.

The commendation signalled a 10-year partnership between the brand and the association. Both parties signed a memorandum of understanding (MoU) to seal the mutual relationship at the company’s corporate head office, in Ikeja, Lagos.

He said his firm’s partnership with NAOMT sets a new benchmark for the brand in quality delivery.

“This partnership comes in different ways we are being engaged, to inspect our facilities, to ensure that our manufacturing facilities are of first class standard, and to ensure that the claims we make for the Mouka well-being products, the orthopaedic and semi-orthopaedic products are substantiated and not just loose marketing claims,” Murphy stated.

He said the company will work together to see what further developments it can bring forth in the future. According to him, the strength of this partnership, is to see how Mouka can technically work together to meet the orthopaedic needs of Nigerian consumers.

National President of the association, Dr. Onigbinde Ayodele, described the endorsement of Mouka as an offshoot of a detailed assessment of the brand’s orthopaedic mattresses.

 

By Okwy lroegbu-Chikezie

The Lagos Chamber of Commerce & Industry (LCCI) has said the exchange rate assumption of N305 to the dollar in the 2020 budget is unrealistic.

Its Director-General, Muda Yusuf, said the exchange rate was difficult to justify, especially at a time declining revenue had become a major issue for the government and the citizenry.

He stated this while responding to the budget proposals presented by President Muhammadu Buhari.

He said the budget numbers underscored the needed to be more innovative in boosting revenue, reducing leakages and ensuring that revenue generating agencies remitted government’s dues.

“We need to do things differently, if we must get a different result,” Yusuf said, commending the government for returning the budget circle to January to December.

According to him, this is good for planning by key players in the economy and would also reduce the uncertainty that has characterized the late presentation and passage of the budget in recent years.

In view of the critical revenue situation reflected in the budget numbers and previous revenue performance, the LCCI boss said no effort should be spared to attract private capital for investment in key infrastructure that may be considered bankable as this would reduce the financing gaps that currently exists.

He said the private sector looks forward to the details of the finance bill proposed by the government in order to ensure appropriate engagement with the legislature before its passage into law.

Yusuf called for a window of opportunity for stakeholders to make their inputs into the budget consideration process.

He said: “We note that the total budget size is N10.3 trillion. The recurrent component is N4.88 trillion, debt service is N2.45 trillion. Together, these two budget items amount to 7.33 trillion, which is 90 per cent of total revenue estimates.

“And from the track record of revenue performance, the percentage may be much higher when related to the actual numbers. All of these indicate that the hope for an impactful investment in infrastructure is dim and would remain so for some time to come”.

According to him, this underlines the imperative of appropriate policy choices to attract domestic and foreign private sector capital for infrastructure financing, adding that the government needs to look beyond tax credit in its quest for more complementary funding sources for infrastructure.

“We should be looking more in the direction of equity financing, but for this to happen the policy and regulatory environment must be right,” he said.

Yusuf commended the proposed Executive Petroleum Industry Bill, saying this would hopefully address the key reform expectations in the oil and gas sector.

“The truth is that the sector has not been able to attract the desired level of investment because of grave policy limitations and the associated uncertainty in the sector.

“It is important to make the crafting of the new bill an inclusive process, taking into account the perspectives of key stakeholders,” he stated.

The LCCI chief also welcomed the decision of government to put in place a framework for government owned enterprises to contribute better to revenue with the introduction of bench marks within a cost to revenue ratio framework.

He maintained that many government-owned enterprises can do better in their remittance of surplus to the Federation Account.

He regretted that debt service commitment and recurrent spending are beginning to crowd out capital expenditure. This scenario, according to him, is not in alignment with the aspiration to build infrastructure and a competitive economy.

Yusuf carpeted the fact that debt servicing of N2.46 trillion is more than the capital budget of N2.14 trillion.

Furthermore, he also welcomed the president’s indication to create a single window to strengthen trade facilitation.

“Related to this is the absence of scanners at the nation’s ports and border posts. It is unfitting that with our stature as the biggest economy on the African continent, we have grossly failed in the use of technology to facilitate our international trade process,” he said.

Yusuf urged the government to ensure appropriate engagement with stakeholders before the passage of the bill into law.

Credit Direct Limited has joined the rest of the world to celebrate and reward their customers and staff at the 2019 Customer Service Week.

The customer service week is celebrated annually during the first full week in the month of October and this year’s celebration spans from October 7 to 11.

This informed the theme of the celebration for this year “The Magic of Service”.

Every outlet of the company across Nigeria is engaged in various activities to make the week more colorful and remarkable. The lineup of activities for this year’s customer service week include: Colleague Appreciation Day, a day to appreciate colleagues for their continued support; Moments with the MD, during which the Managing Director, Akinwande Ademosu called to appreciate outstanding customers and staff of the Company.

There was also Community Engagement Projects, where various Corporate Social Responsibility initiatives were execute (Renovating 25 schools in Nigeria, providing seats and study materials to schools, providing pipe borne water to communities, among others) aimed at enhancing the well-being of their host communities.

Free Medical Checks will be extended to civil servants in selected locations across the Country during which Medical professionals will provide consultation and dispense drugs to them; The week will be rounded off with a Costume Day; a day for all staff to represent any tribe they choose by wearing a cultural dress. This is done to appreciate Nigeria’s rich diversity and promote unity amongst staff.

To flag off the week-long activities, Ademosu, expressed his gratitude to staff for their excellent works and commitment. He charged them to be deliberate about delivering excellent services at every duty and task towards customers and their colleagues.

He also promised to ensure that Credit Direct will always provide the right environment to foster service and excellence.

Divisional Head, Customer Experience & Corporate Communications, Credit Direct Limited, Achia Tor-Agbidye said, “Credit Direct is always committed to offering excellent services to our customers, both old and new.

“We are using this medium to appreciate and reward our customers for their continued support and preference for Credit Direct services and our customer service teams for their commendable work all year round.”

A fresh automotive policy bill is in the works. It will replace the suspended six-year-old National Automotive Policy introduced in 2013. This followed calls for a review by members of the Organised Private Sector (OPS), who argue that the policy has become outdated, and negatively impacts government revenue and the economy’s capacity to create jobs. But, there are doubts that without the political will to force diligent implementation of the new policy and fix the nation’s decrepit infrastructure, it will not deliver on the strategic objective of revamping the auto industry. Assistant Editor CHIKODI OKEREOCHA reports.

At last, pressure by members of the Organised Private Sector (OPS) and some auto industry stakeholders has forced the hand of the Federal Government, through the Minister of Industry, Trade and Investment, Adeniyi Adebayo, to suspend the six-year-old controversial National Automotive Industry Development Plan (NAIDP).

The Minister, last week, announced the suspension of the NAIDP initiated by the administration of former President Goodluck Jonathan. This was at the fifth Presidential Policy Dialogue organised by the Lagos Chamber of Commerce and Industry (LCCI) in Lagos, where he said plans were afoot to send a new auto policy bill to the National Assembly.

The Federal Government introduced the suspended National Automotive Policy (NAP) on October 3, 2013. It was drafted by the National Automotive Design and Development Council (NADDC), simply called National Automotive Council (NAC), with input from the Nigerian Automobile Manufacturers Association (NAMA) and other organisations in the industry.

NAC, a parastatal under the Ministry of Industry, Trade and Investment, was established by Act No. 84 of August 25, 1993, and NAP’s strategic trust, which it designed, was to ensure the survival and growth of the automotive industry, using local, human and material resources.

The Council drafted the progressive policy in the hope of making cars cheaper in Nigeria, domesticate their production, create jobs and bring about the much-needed transfer of technology to drive Nigeria’s industrialisation. The policy was also expected to help conserve scarce foreign exchange.

Objectives of policy

By promoting the local assembly and production of vehicles, it was envisaged that the policy will halt, or at least, significantly reduce the estimated $8 billion spent on the importation of vehicles yearly.

But the policy was set aside last week, with Adebayo saying that a new bill was underway, and will contain the input and views of auto stakeholders, private sector operators and interests of Nigerians to achieve inclusive industrialisation and growth in local vehicles manufacturing in Nigeria.

Justifying the suspension of the auto policy, the minister said President Muhammadu Buhari declined assent to the recently passed auto policy bill by the Eighth National Assembly because it was not well received by stakeholders, hence the need for a new bill.

He said the OPS and auto stakeholders had mounted pressure over what they considered as negative implications of the policy for the economy, especially since the old policy adversely impacted on the cost of doing business, welfare of Nigerians, the government’s revenue and the capacity of the economy to create jobs.

Adebayo pointed out that since he assumed duties, he had been inundated with public outcry and stiff opposition from the OPS for a review of the auto policy since the one instituted by the Jonathan administration in 2013 was long overdue without any meaningful impact on the development of vehicle manufacturing.

Although the minister harkened to the OPS’s call for the policy’s review and has initiated moves to for a fresh bill that will give legal backing to a new auto policy to the National Assembly, the coming of new policy may have been received with measured optimism by experts and keen observers of the auto industry.

Some of them, who spoke with The Nation, expressed doubts that the government would latch on the new policy to realise the strategic objectives of cutting down on the nation’s humongous vehicle importation bill by encouraging local manufacturing of vehicles, as well as phase out used cars, popularly known as ‘Tokunbo.’

Why importers pushed for review

For instance, a used vehicle importer admitted that the OPS had justifiable reasons to push for the policy’s review. The importer, who opted to remain anonymous, however, pointed out that the issues put forward by the OPS failed to address the more fundamental issues of shoddy implementation and lack of critical infrastructure, particularly electricity supply.

He said as far as he is concerned, the minister merely played to the gallery when he announced the suspension of the auto policy without articulating a comprehensive and workable strategy on how government intends to close the huge infrastructure gap holding the auto industry down.

Before last week’s suspension of the policy, several stakeholders, including the OPS, had pressured the Federal Government to suspend it. They argued, for instance, that the policy, which raised the import duty of vehicles from 10 per cent to 35 per cent, with an additional 35 per cent surcharge, fuelled smuggling of fairly used vehicles, otherwise known as Tokunbo, into Nigeria.

LCCI Director-General, Mr. Muda Yusuf, who was quite vociferous in pushing for a review, added that the old policy caused massive trade diversion to neighboring countries. He also expressed regrets that six years into the policy’s implementation, not much progress has been made. If anything, the policy, he said, has adversely impacted the cost of doing business in the country.

Giving more details of the Chamber’s grouse over the policy, the LCCI DG said even though over 50 vehicle assembly plants licences had been issued since 2013, when the policy came into force, the total yearly assembly of new cars in 2017 and last year was fewer than 10, 000 units.

He lamented that the cost of vehicles had risen beyond the reach of most Nigerians and corporate bodies, while impacting negatively on businesses. According to him, the high cost of vehicles has taken a huge toll on the economy, from logistics cost and welfare point of view.

The LCCI chief said manufacturers and other real sector operators and investors were suffering from high cost of delivery vehicles and sharp increases in haulage cost because of the high cost of trucks.

Also, school buses, he said, had become unaffordable for many institutions, even as many hospitals could not afford ambulances. Also, many corporate organisations have cut down on their fleet, while vehicle ownership is  beyond the reach of most of the middle class.

Continuing, Yusuf said: “The automobile sector was hit by the double shock of currency depreciation of over 80 per cent over the last six years, and an import duty hike to 70 per cent on new cars and 35 per cent on used vehicles and commercial vehicles.”

He said though the economy has witnessed an increase in the price of vehicles of between 200 and 400 per cent over the last five years, not many investors and Nigerians have the capacity to pay these outrageous prices.

Yusuf regretted that even prosperous corporate organisations are now buying used vehicles for official use, noting that the implication of the scenario for operational costs of organisations was worrisome.

The LCCI boss maintained that the policy was not in consonance with the Nigeria Industrial Revolution Plan (NIRP), which is the main industrial policy document of the  administration. According to him, the NIRP espouses the strategy of resource-based industrialisation.

Auto policy as import substitution

But the auto policy was an import substitution industrialisation strategy. And, according to experts, import substitution strategy can only thrive in the context of high domestic value addition, which, unfortunately, was and still is evidently lacking in Nigeria.

Yet, it is within such a framework that the economy could benefit from the inherent values of import substitution, which the auto policy espoused, including foreign exchange conservation, job creation and import bills reduction, among others.

But at the core of the auto industry narrative, according to the importer, is the belief that the auto policy was premature, and that government put the wrong foot forward when it came out with the policy without first addressing the huge infrastructure gap in the industry, particularly power.

The consensus is that a steady electricity supply is critical to any manufacturing entity, including auto manufacturing. Independent generation of electricity by auto companies adversely affects prices, the result of which would be borne by end users and this inadvertently erodes part of the gains of setting up the auto plants.

The importer recalled, for instance, that lack of infrastructure, particularly power, was partly responsible for the disappearance of several auto assembly plants in the past. He noted that while there is nothing wrong with the country aspiring to return to a viable and competitive auto industry, there is need to go back to the drawing board and address the issue of lack of enabling environment that saw the disappearance of some of the once vibrant auto plants from the nation’s industrial landscape.

Indeed, in the past, auto firms, such as Peugeot in Kaduna, Steyr in Bauchi, Leyland in Ibadan, and ANNAMCO in Enugu dotted the landscape.