The Nation Newspaper

Tag: auto policy

  • ‘Nigeria losing over $8billion to non-passage of auto policy’

    Luqman Mamudu is the former Director of Policy and Planning Department, National Automotive Design and Development Council (NADDC). In this interview with Charles Okonji, he gives a bird’s eye view of the nation’s auto policy vis-à-vis the challenges in the sector. Excerpts:

    It has been argued that the non-passage of the automotive policy bill will further hamper the development of the auto sector. What is your take?

    It definitely will hamper and actually already slowing down activities in the real sector apart from limiting inflow of foreign direct investment. Most Original Equipment Manufacturers (OEMs) plan long term and are therefore more comfortable with assurance of policy endurance which this bill guarantees. This is provided for because we do not have a long term policy development choice which minimises impact of changes in regimes. It means that our reputation for sustaining policy is poor ever since the International Monetary Fund (IMF) pushed us to abandon long term planning. Most OEMs are therefore waiting in the wings for this legislation to commit their resources.

    Secondly and very key, is a provision in the bill to facilitate Nigeria Customs administration with clear definitions of Semi Knocked Down (SKD), Completely Knocked Down (CKD) and local content development import incentive program . In this regard, the tariff technical committee and NADDC is expected to provide for the dedication of Chapter 98 in the tariff book. Right now, there is so much confusion arising from ignorance about definitions, who is entitled to what, etc. It has led to industry crippling delays to the embarrassment of stakeholders as the public and enemies of the policy now begin to question its relevance. While others are asking for its review, some are insisting on outright suspension. Luckily I was recently invited to chair an Ad-Hoc committee by Bureau of Public Enterprises (BPE) under the Vice President Office to Review the policy. There are instances where assembly plants are only able to do single circles of import a year! and sometimes, while struggling to do this their annual renewable license expires.  Their goods are stuck in the ports and the process for renewal is bugged with bureaucracy and the inevitable consequence of huge demurrage bills. This is apart from the prohibitive logistics costs. The existing players are definitely frustrated and those waiting in the wings are hesitant.

    As the former acting DG of NADDC, can we have your response on the position of NADDC when you left?

    Haven acted as a DG, though briefly, before handing over to the present DG who was already appointed but yet to resume. The policy has five pillars and the bill was one of the most critical of them. We pursued its passage desperately such that by October 2017 when I exited, the bill had successfully passed the two chambers of the Legislature. It was just remaining to be cleaned by the legal department before presentation to the President for consideration and assent. But I learnt some overzealous officials derailed the process. I was delighted to know, just this week, from the Director General of NADDC, Mr Jelani Aliyu, that this confusion has been cleared and that efforts are in top gear to get it to the President’s table. I have no doubt that it will be signed considering the commitment of this government to economic diversification.

    What can you say is responsible for the underdevelopment in the sector?

    Nigeria automotive sector activities were really basic in the colonial period including during the first National economic plan 1962-1968, where private companies such as the British Engineering West Africa Automotive Company (BEWAC), CFAO and others were mostly engaged in the import of Fully Built Up vehicles (FBUs) automobiles but with very marginal assembling operations. It was Chief Obafemi Awolowo who worked with technocrats and Nigeria economists including Professor Adebayo Adedeji, Allison Ayida and Phillip Asiodu that made the industry a priority in the 2nd National Develoment Plan 1970-1974. This saw the establishment of two car plants; Volkswagen of Nigeria, and Peugeot Plant. The 3rd National Development Plan saw the establishment of four commercial vehicle plants; Styre, Fiat, Mercedes and Leyland. In the 80s Nigeria had installed capacity to meet nearly all our automotive needs by the listed government joint ventures with OEMs and some private companies. The gap was filled with import quotas; not without some controversies though. The plants all had their local content development programs. Peugeot for instance had about 68 local content suppliers including Paints, Windscreen and all side glass, wire harnesses, batteries, tires, Radiators, seats and seat belts, Engines sleeves etc.

    However, in 1985, the IMF convinced us to abandon National planning and embrace free market economy. Since the industry was still at infancy and largely import dependent, its products became uncompetitive especially with imported second hand vehicles. Don’t forget that Nigeria equally devalued the naira. You know the rest story. Today the market remains dominated with vehicles from scrap yards of Europe, America and Asia. The automotive industry cannot survive where used vehicles are allowed free inflow.

    As an authority in the auto industry, what will you advice the government to do in order to revitalise the sector?

    The government got it right by launching an automotive policy in 1993 and by establishing the institutional framework for its implementation. NADDC, through legislation relaunched in 2014 a further consolidated policy rolling out the National Automotive Industry Development Plan (NAIDP 2014-2024). This policy has long translated into specific action but the problem is that the fiscal measures are firmly in place, and the accompanying programs which are actually the pillars have not received the desired attention. This include passage of the “Bill” that we have already mentioned, creation of a programme to moderate impact of restricting inflow of second hand vehicles, the establishment of an automotive credit purchase scheme/smuggling control measures, development of quality assurance capacity, and manpower development program. These are fully spelt out in the NAIDP. Copies are in the public domain.  We had this and Business information document (BID) on the website as well www.naddc.gov.ng.

    As at 2017 we already had installed assembly capacity for about 500,000 vehicles annually, but till date not up to 8 percent of that capacity is assembled because of gaps I had earlier identified. Notable global brands are already in the country, and in partnership with Nigerians which I describe as patriotic. There are more waiting, such as Nissan, Hyundai, Honda, Peugeot, Yutong, Sinotruck, amongst others are here. My fear is that if NAIDP programs are further delayed, with the prompting of those who hate the policy passionately, especially those who ignorantly insist that the fiscal measures constitute leakage in our revenue and therefore daily plotting to remove them will undermine the policy. The whole idea is to sustain fiscal measures which are bitter to importers of FBUs long enough for the industry to gain traction before reduction. This strategy has worked elsewhere, including South Africa and it will work in Nigeria if it is properly and timely implemented. I am this worried because we had openly presented our strategy at ECOWAS fora as a result of which the automotive industry was admitted as the 3rd Regional Industry Priority. Before we showed up, it was Food, Construction and Pharmaceutical. Recently, I heard of our neighbouring countries launching automotive policies.  If the Pan Africa free trade agreement works, Morocco and others will flood this country with new automobiles before we say Car. I am not against the free trade anyway but I feel we should be ready to play as equals. We may end up importing from them if they get their act right faster.

    In terms of value or money, how much does the country loss annually to import of automobiles?

    According to NBS, it is about $8 billion annually. I know that we import above 400,000 vehicles annually. The sad part is that 89 percent of these are used vehicles. It simply means that we loss not only forex but create job opportunities for countries of Origin while subjecting our population to health hazards. Most of these vehicles no longer meet integrity tests in their home countries. SON should do something about this immediately. They should demand integrity certificate if they don’t already. Our balance of payment receives the most strain from this source. This will continue as the middle class grow. The first item they buy is car, and the irony of it is that we have crated local capacity. Don’t listen to those who tell you that the capacity is largely for SKD. The SKD is not a Nigeria term. It’s the baby step in developing the industry. It opens up the opportunity to step up to the next level. An indigenous company like Innoson Motor vehicle Manufacturing is already at CKD level and the PAN plant in Kaduna is a world class CKD plant amongst others. I don’t know what AMCON is doing with it.

    Knowing that viable automobiles industry will create over 2, 500 components companies can you mention some of the companies and the amount of jobs it expected to create?

    I do know that the automotive industry if well-established can account for up-to 12 percent of GDP. You know what that means. The component industry is actually where the jobs are created and local content being implemented. This is why it must be encouraged but you must first achieve good assembling capacity before you can attract components manufacturers to partner with Nigerians just as it is happening at the assembling level now. The automotive supplier chain is global. Once they notice the level of orders for SKD and CKD kits orders originating from Nigeria in critical mass, they will come here. They are already making serious inquiries. I heard the DG NADDC mention the desire of the South Africa Components manufactures to invest here.

     

    I am a serious advocate for this and have recently taken the initiative with some local automotive dealers to set up a platform Resident Automotive Components Dealers Association of Nigeria (RACDAN) to nurture dealers’ way up to domesticating manufacturing of products of global standards for OEM and replacement market. We have applied for partnership with Standards Organisation of Nigeria (SON) to ensure members compliance. The development of specialist automotive supplier parks should be accelerated. I was delighted to read about an economic zone with 80% completion in Benin. This will attract components manufacturers.

    Can you mention some of the content of the auto policy and what it stands to achieve?

    The focus of the policy is to create the right environment for existing and potential players in the industry to produce and be competitive in the global automotive industry. The fiscal measures are expected to be moderated as the industry gain traction. In this regard, the NAIDP contains programs, like I said earlier, to address quality, infrastructure, manpower development, and market and investor confidence.

     

     

     

     

     

  • Auto Policy: Breathing freshness into the economy

    Five years after the repackaging of the national automotive policy, stakeholders have expressed satisfaction with the policy. They say it is yielding positive results and attracting investors globally, OKWY IROEGBU-CHIKEZIE reports.

    Globally, the automotive industry plays strategic and catalytic roles in economic development. This is in terms of its capacity to employ a high number of manpower directly, and also the multiplier effect of cottage industries that spring up as a result of the assembly plant.

    Therefore, when the Federal Government repackaged the automotive policy, stakeholders were upbeat about its ripple effect on the economy. For them, the policy, if properly implemented, will give birth to several small-scale industries, which economists refer to as the wheels on which an economy run.

    The objective of the national automotive policy is to restore assembly and develop local content; thus, creating employment, acquiring technology and reducing pressure on the country’s balance of payment. This thinking may be right given that when the country’s automobile industry was vibrant, several industries sprang up across the country in the glory days of Peugeot Automobile Nigeria (PAN), in Kaduna State

    For instance, Exide Batteries, in Ibadan, Oyo State, supplied PAN batteries for vehicles manufactured at its Kaduna plant. Similarly, the upholstery works in its vehicles were manufactured by a local firm, while Dunlop Nigeria Limited supplied tyres.

    Indeed, efforts to attain an effective automotive sector have been continuous and as the policy continued to evolve over the years with necessary tweaking and remarkable achievements have made.

    Currently, hitherto comatose assembly plants are breathing fresh breathe. As at the last count, over 14 assembly plants, such as PAN, Innoson Vehicle Manufacturing Co. (IVM); Anambra Motor Manufacturing Company (ANAMMCO) and Leyland-Busan, have started assembling new products since 2014. New plants are also coming to live. This, stakeholders say, is a remarkable feat considering that before this policy, three out of the five assembly plants established in the 1970s had become moribund.

    Under the policy, 29 of the 54 licensed assembly plants as at last February are now operational. With a total installed capacity of 419,190 units, actual production of 8,628 units have been achieved so far.

    A cursory look at the assembly plants presents a solid foundation of hope for the industry. For instance, Dangote Sinotruck West Africa Limited, a partnership between Dangote Group and Sinotruck, comes with an investment portfolio of $100 million for truck assembly. The partnership will assemble and produce full range of commercial vehicles covering heavy duty truck, medium truck, light truck and other semi-trailers. With this, the firm aims to meet an expected current demand of these segments of automobiles required for logistics, construction, food & beverage industries in the country. The company has installed capacity to assemble and produce 10,000 trucks annually and this alone will create 3, 000 jobs across Nigeria.

    The turnaround story of ANAMMCO is another positive for the automotive policy. The company downsized its staff in 2011 due to the unfavourable business conditions. The downturn in business also affected employment down the value chain. However with the policy, ANAMMCO recalled 200 of the staff that had been laid off. The company is currently waxing stronger and has received several proposals from Original Equipment Manufacturers (OEM) interested in establishing local assembly presence.

    And the Minister of Industry, Trade and Investment, Okey Enelamah, takes delight in all of these. “The achievements made so far confirm the high potentials of the policy to grow the automotive sector,” an obviously elated minister said.

    The policy has also generated interest outside the country. Recently, a delegation of international automotive investors, comprising original equipment manufacturers and other stakeholders visited the country. Among others, they sought to gain insight into the opening business opportunities and investment environment in the Nigerian automotive sector;  assist in the shaping of national and state policy to support industry overall and domesticated manufacturing for the automotive sector;  gain insight into the automotive sector & potential for enhanced manufacturing in Nigeria; build relationships and networks with key Government and private sector figures; and to  deepen the structured business links and investment between the private sectors of Nigeria and South Africa.

    Enelamah, while receiving the delegation said: “We are excited by the role the automotive industry plays in the strategic and catalytic economic development of countries and we are committed to developing the sector speedily to facilitate the economic diversification of the country.”

     

  • Don seeks better implementation for auto policy

    A senior lecturer with the Covenant University, Otta, Ogun State, Dr. Oscar Odiboh, has advocated optional implementation models for the nation’s ailing auto industry.

    Odiboh, who spoke in Lagos recently at the Nigeria Auto Journalists Association (NAJA) monthly industry forum, held in Surulere, made his submission against the background of the four years old Nigeria’s automotive industry development plan (NAIDP) by the Federal Government, which has been roundly criticised by industry stakeholders.

    According to Odiboh, there is an urgent need to re-jig the implementation style of the policy, hence, he suggested three implementation models as follows: Joint implementation, Sole implementation and NEED implementation.

    Under Joint implementation, (which he outlined into partnership/co-investor model, provider model and cap investment model), Odiboh advocated involvement of the Nigeria Auto Manufacturers Association (NAMA), Original Equipment Manufacturers and government as joint deciders, sharing the risks and benefits and shared responsibilities.

    On sole implementation model, he canvassed deregulated private sector and regulated public models; while the NEED implementation models covers the Single need model and multi stage need models.

    Odiboh, who spoke on Implementation of Nigeria’s Auto Policy: The way Forward, insisted that  the industry is divided and may not thrive until the stakeholders collaborate.

    He observed that almost mid-term into the 10- year plan, most of the assembly plants set up in the country lack the standard to compete globally, and can hardly be called assembly plants.

    “What we have at the moment are not real assembly plants, they are glorified joineries. Average 65 per cent of our assembly operations are manual, while 70 per cent of employees are casual,” he said.

    It would be recalled that the National Automotive Design and Development Council (NADDC), the Federal Government agency saddled with the responsibility of implementing the auto policy, has repeatedly claimed that there are over 50 auto assembly firms in the country, hence alluding to the success of the policy.

    Odiboh, who noted that players in the sector were frustrated through importation rules, added that more than 60 per cent of tools in the sector are manual.

    Calling for budget cars, Odiboh stressed that the sector’s inability to offer affordable vehicles for mass market would keep used market growing to the detriment of the sector.

  • NADDC affirms govt support for auto policy

    NADDC affirms govt support for auto policy

    The National Automotive Design and Development Council (NADDC) has dismissed insinuations that the Federal Government may have jettisoned the National Automotive Policy owing to the situation of the economy.
    Its Director General Aminu Jalal, who refuted the allegation as baseless and unsubstantiated, said the government has already resolved to substantiate the policy initiative as part of her efforts to empower the automotive industry as viable alternative to oil.
    Jalal spoke in Lagos at the Manufacturing and Equipment Expo.
    He said: “It is already assured the new government will continue with the policy, and the response so far has exceeded our expectations. Our emphasis as it is, has shifted to the development of automotive component.”
    According to him, five South African companies have indicated interest in establishing component manufacturing plants in the country just as some Chinese investors have similarly indicated interest in exploring opportunities in the auto industry.
    Jalal said no fewer than 14 assembly plants have since 2014 begun operations, assembling new products including cars and SUVs like Nissan, IVM, Peugeot, Hyundai, Honda, Kia, Volkswagen, Ford, Changan and GAC.
    Whilst in the bus and truck category, Hyundai, Ashok-Leyland, MAN, Anammco, Leyland-Busan, IVM, FAW, Sino, Shacman, Aston, Foton, Forland and Isuzu are among notable brands currently being produced at various facilities in Nigeria. This is in addition to Proforce armoured vehicles wielding installed capacity for over 300, 000 units annually, he affirmed.
    Jalal said these plants, in 2015, contributed 75,000 units of vehicles including concessionary imports representing 75 per cent of estimated 100,000 new vehicles that made it into the market during the period under review.
    Also adding that the industry is long-term in nature and requires policy continuity and constituency, the NADDC helmsman said Nigeria is on track to becoming a vehicle manufacturing nation.
    He said: “The Nigerian automotive development plan is our best chance of developing this vital industry and making Nigeria Africa’s leading automotive hub, especially when viewed against the market potential of the ECOWAS and Central African countries estimated at one million vehicles annually.
    “One of the convictions of the National Automotive policy is to have vehicle assembly operations with increasing local content absorption that could evolve from one stage to another, for instance from SKD2 (semi-knocked down) to CKD (completely knocked-down) operations without exceeding 12 months or maximum 36 months including a set-up period of 12 months.”
    This institutional framework is validated in article 5.1 of the National Automotive Policy, which states inter alia “there will be phased component parts deletion programme for cast, pressed and forged body and mechanical parts and trim/accessories with the establishment of relevant engineering infrastructures. And in item 6.1, “Local and foreign investors shall be encouraged to establish automotive vehicles and component parts outfits.”
    The NADDC director said the biggest multiplier effect of automotive manufacturing comes with component manufacturing, saying the more you localise the higher the number of jobs created, and the deeper you go downstream, the more jobs you create.
    “Assembly operations alone account for about 15 to 20 per cent of the cost of the vehicle. When you add local content, you now increase the value added. We are hoping that within the next five years, we will reach value addition of about 30 to 40 per cent,” he said.

  • Auto policy to create 700,000 jobs, says NIPC

    Auto policy to create 700,000 jobs, says NIPC

    The Nigeria Investment Promotion Council (NIPC) has said the implementation of the new automotive policy would create over 700,000 jobs.

    Speaking at the stakeholders’ forum on the Nigeria automotive industry, NIPC Executive Secretary, Ms. Yewande Sadiku, who was represented by Director, Department of Real Sector, NIPC, Mr. Reuben Kifasi, said the implementation of the automotive policy would create jobs in different clusters in the country and across the automotive value chain.

    She said: “First and foremost, the automotive industry is the most global of industries and a clear policy and strategy will serve as the route map towards Nigeria becoming a major automotive hub and significant contributor to the global value chain.

    “This will create much needed jobs, add value, boost exports, help local businesses to grow, stimulate regional development and sustain inclusive economic growth.”

    According to Sadiku, it will fast-track the growth and development of other intervening industries such as automotive spare parts, auto servicing, steel industry, rubber, petrochemicals and plastic industries, among others.

    She noted that the Nigerian National Automotive Policy, enacted in 2014, underlined the commitment the government was making to create an enabling environment where investors, local and international, can profitably serve customers in Nigeria, throughout Africa and beyond.

    Sadiku added that the public-private-dialogue was a powerfull vehicle for crafting and realigning policies, and that the feedback from such an experienced and well-informed audience will provide invaluable feedback to temper policy and sharpen strategic direction for a renaissance of the automotive industry in Nigeria.

    “As the agency of the government of Nigeria responsible for attracting domestic and foreign investment and helping indigenous companies expand, NIPC is committed in 2017 to closely collaborate with National Automotive Design & Development Council (NADDC) and other key stakeholders to promote investment into the automotive industry,” she said.

    The NIPC boss said the agency was committed to fulfilling its policy advocacy role to sustain improvements to the investment climate, thereby creating a conducive environment for private investors to actively drive the development of the sector for the benefit of the economy and people of Nigeria

  • ‘Fed Govt committed to implementing auto policy’

    The Federal Government remains committed to the implementation of the Nigerian Automotive Industry Development Plan (NAIDP), the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, has said.

    At a stakeholders’ forum on the policy, tagged “Setting an Implementation Agenda for the NAIDP” in Lagos on Monday, Enelamah said all that was needed to implement the plan was an enabling environment and a partnership between the government and stakeholders.

    His words: “Value addition is very important in implementing the automotive plan and the government needs to create an enabling environment for the plan to work. The whole essence of the plan is to foster backward integration and local content utilisation in vehicle assembling, which will in turn create jobs for our productive youths.

    While noting that there is a great need to continuously engage with the stakeholders, which was the main reason for the forum, the Minister said the government recognised the importance of such engagement in order to revive the industry using local content.

    “The government recognises the contributions of the automotive industry to the implementation of the Nigerian Industrial Revolution Plan (NIRP) and we believe it is better to build on the policy than creating another,” Enelamah said, pointing out that the forum was the first in the series of engagements the government was planning with stakeholders.

    The Director-General, National Automotive Industry Development Plan, Mr. Aminu Jalal, said the policy was re-launched in 2013 with very clear fiscal guidelines and programmes to run initially for 10 years, with periodic properly phased reviews.

    As he explained, “Its main objective is to bring back vehicle assembly operations and develop local content. To gain investors’ confidence, additional effort was made to legislate and it passed both houses successfully as a package of incentives.

    “Since the approval of the policy in October 2013, the 14 existing assembly plants and body builders, which were on the verge of closure, had a new lease of life and obtained or renewed technical partnership agreements with global Original Equipment Manufacturers (OEMs).”

    According to Jalal, over 20 other auto firms had either commenced or were in the process of starting the assembly of vehicles in Nigeria.

    The Managing Director, VON Automobile Nigeria, Mr. Tokunbo Aromolaran, while speaking during a panel session, said there was the need to put a stop to the importation of cars through land borders. He said the borders were so porous that they give the customs little or no power to control the importation of used cars, which was a threat to local production.

    The Managing Director, Toyota Nigeria Ltd, Mr. Kunle Ade-Ojo, also said more legislation was needed to give more support to the policy. “The automobile industry is still grappling with a lot of challenges like poor maintenance culture, inadequate incentives for local manufacturers and assemblers and a generally unfavourable environment to grow. “So the best thing to do is just the implementation of this plan, even though the size of the market is still an issue,” he said.

    Ade-Ojo further stated that it is a bitter truth that the market for used cars is still very large, hence the need to put the issue into consideration when implementing the auto policy, especially when talking about pricing and taste of the average Nigerian.

    “How can we convince about 100 million middle and low level Nigerian to buy a new car of X price instead of a used car he would rather buy for a cheaper price?” he asked, adding: “this is something we need to consider, even as businessmen and the government. There is a great need to put in place a finance solution to meet the needs of the Nigerians that we want their tastes to change to buy new, made-in-Nigeria cars.”

  • How to make auto policy work, by expert

    Managing Director of Mercedes-Benz Centre, Benson Uwatse has cautioned the National Automotive Design and Development Council  in its drive to implement the auto policy, saying there is no proper legislation on it by the National Assembly.

    Uwatse disagreed that a Semi-Knocked Down (SKD) vehicle will be less cost effective compared to fully built imported ones.

    He spoke in Lekki, Lagos at a briefing to mark the 25th anniversary of Mercedes-Benz Automobile Services, 30 years of four-wheel drive system developed by Mercedes-Benz (4matic) and 90 years of Bang & Olufsen.

    The government, he said, needs to examine the auto policy thoroughly before its full implementation for it to be effective.

    “You cannot announce a policy today and say it is taking effect from tomorrow. That has always been our problem with it and since then we have been struggling with it,” he said.

    According to him, it took South African automotive industry 15 years to get to where they are today, urging the council to take a gradual process.

    He identified lack of infrastructure as one of the banes of the sector.

    “Where is the Infrastructure? In Nigeria today we do not have an industry that manufacture windscreen wiper, which is the smallest and cheapest level of ancillary item you need in a car. Even the tire industry has disappeared to Ghana and other places,” he said.

    Uwatse said much as they are not oppose to the policy, Mercedes- Benz would not want their cars assembled where the skills to handle them are not available.

    “In my workshop for instance, for every technician that we find good enough to employ, we would have interviewed nothing less than nine before we pick one that we could train and you tell me that I should assemble these cars behind you in Nigeria?” he queried.

    Uwatse described the anniversary as a special occasion for his company.

    “We used to be Mercedes-Benz shop out there in Masha, Surulere” he recalled, adding: “And it was our dream that one day, we would have a place called Mercedes-Benz Centre. We did it in 2011.”

    Mercedes-Benz, he noted, had been in business for 130 years, while Band & Olufsen had done 90 years.

    “And to celebrate their 90th year, they invented something that does not look like loudspeakers,” he said.

    Uwatse said there is a synergy between Mercedes-Benz and Bang &Olufsen, saying sound systems in most Mercedes-Benz come from the latter.

    “Bang & Olufsen is a high-end quality product and Mercedes-Benz is also a high-end quality product. In Nigeria, I am the link between the two. If you look into our database, you’d find that quite a few of the people that have bought Mercedes-Benz cars from us have also bought bang and Olufsen.”

    Emphasising the synergy between the two premium brands, the General Manager of Bang & Olufsen Nigeria Limited, Mrs Chinwe Uwatse said just as one could find 40-year-old G-Wagon that is still on the road, and the owner will not sell it, the same is applicable to buyers of Bang & Olufsen products.

  • Buhari cautioned on auto policy implementation

    From maritime stakeholders have come a piece of advice for the incoming Muham-madu Buhari administration – do not implement the National Automotive Policy in a hurry.

    The policy was introduced in 2013 by the outgoing President Goodluck Jonathan administration to build Nigerian-made vehicles.

    The stakeholders, at a Town Hall Meeting by Ships & Ports Communication in Lagos, urged the President-elect to ensure that auto assembly plants roll out locally assembled vehicles before the policy is implemented.

    Some of them alleged that some of the approved auto assembly plants are hiding under the policy to import fully-built units of vehicles as semi-knocked down (SKD) units to shortchange the government and evade Customs duty.

    Comptroller-General of Nigeria Customs Service (NSC) Alhaji DIkko Abdulahi, represented by the Assistant Comptroller-General, Tariff & Trade (ACG) Banke Adeyemo, said in the past Customs men caught importers who removed some imported vehicles’ tyres, claiming that they were SKDs so as to pay less duty.

    “Of course, we won’t allow that to happen, so we raise the proper duty and ask them to pay,” she said.

    National Automotive Council (NAC) Director-General Aminu Jalal said Nigeria imported about $7.5 billion new and used spare parts in 2013.

    The country, he said, has a growing middle class of 40 million people, with a potential vehicle market of one million units yearly.

    The NAC helmsman, represented by the agency’s Director of Industrial Infrastructure,Kolapo Odetoro, however, said the country must check the huge foreign exchange used in importing vehicles.

    “The local manufacturers of vehicles will therefore not only create wealth but generate a large number of Small and Medium Enterprises.

    “It would create employment, boost our local engineering capacity through spillover effects and develop our local raw materials.

    “NAC is already working with the Federal Road Safety Corps (FRSC) and the Nigeria Customs Service on this issue. Measures to control vehicles smuggling through the control of vehicle registration system are being worked out,” he said.

    Chairman, Nigerian Ports Consultative Council (PCC), Otunba Kunle Folarin, said: “We should ask ourselves whether the investors can sustain competiveness, slow growth economy or change in the mobility of people.”

    The Deputy President, National Association of Government Approved Freight Forwarders (NAGAFF), Mr Fred Akokhia, said the auto policy is a catalyst for industrialisation.

    He advised the incoming government not to rush into implementing the policy.

    “The government should not rush into implementing the policy; rather, they should check for what led to the mistakes of the past in order not to repeat it. We should do it in a way that when we come out of it, it would be a near perfect policy,” Akokhia said.

    The National Publicity Secretary, Association of Nigerian Licensed Customs Agents (ANLCA), Mr Kayode Farinto, described the auto policy as “dead on arrival”.

    He wondered why NAC failed to use the money realised under its two percent levy to develop the industry.

    “NAC should empower various higher institutions so that they could do research and develop new technologies.

    “We must ensure that there is stable electricity because without stable electricity, we can’t get the policy right,” he said.

     

  • ‘Auto policy may hike transportation costs’

    A maritime expert, Mr. Lucky Aimewero, has cautioned against the implementation of the automotive policy from June.

    The implementation, initially slated for January, was deferred to enable stakeholders’ key into it. The policy is meant to promote local manufacturing of automobiles.

    But Aimewero, President of National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), in a statement, said the policy’s implementation may have adverse effect on the transportation of passengers and goods.

    He said the hike of import duties from five per cent to 35 per cent on trailers, semi-trucks and buses would push the prices of imported vehicles out of the reach of Nigerians.

    The policy, he maintained, would take its toll on the availability of vehicles, thereby leading to high cost of transportation as those who could afford to pay the new import duties would increase transport fares.

    According to him, when the new duty regime is added to other charges, such as the Value Added Tax (VAT) that must be paid before clearing the vehicles, the cost would shoot through the roof.

    The shift in the deadline for the policy’s implementation, Aimewero said has started taking its toll on the volume of vehicles cleared at the Apapa Ports.

    Government, he said, should rather strengthen local assembly plants and ensure the development of cluster manufacturers that would produce the essential parts needed by the plants.

    If the policy is not well thought out and legislation and framework put in place, local plants may soon be overwhelmed by the demand for the vehicles produced, Aimewero said, adding: “I foresee a situation where demand, especially for small and large capacity buses needed for mass transportation, will overshoot supply and this would adversely affect transportation of passengers and goods in the country.”

    He said rather than rush into taking off with the auto policy, government should tinker with how to further strengthen the transportation sector, encourage those interested in developing  local capacity and ensuring that the wheel of transportation moves unhindered.

     

  • Auto policy: Fed Govt, stakeholders agree on implementation

    Auto policy: Fed Govt, stakeholders agree on implementation

    • 10 more auto plants coming

    The Federal Government, vehicle manufacturers, dealers and Licensed Customs Agents, among other stakeholders, have agreed to the full implement of the National Automotive Industry Development Plan in line with global best practices.

    The stakeholders agreed that the sustained implementation of the policy with periodic reviews to suit the economic needs of the nation, was in the interest of Nigerians and the Nigerian economy.

    The Minister of Industry, Trade and Investment, Olusegun Aganga, said the extensive stakeholders’ consultations and collaboration has afforded the Federal Government the opportunity to access the level of progress so far recorded in the implementation of the policy with a view to addressing major challenges  facing players in the sector.

    Aganga, who spoke after a meeting with members of the National Council of Managing Directors of Licensed Customs Agents in Abuja, yesterday, said with the level of success so far recorded, 10 more auto plants have finalised plans to begin operations in Nigeria before the end of the year.

    He said, “Within the past one week, we have been holding consultative meetings with stakeholders in the automotive industry, including all the vehicle assemblers across the country and the National Council of Managing Directors of Licensed Customs Agents.

    “This is to review the current level of the implementation of the National Automotive Industry Development Plan; to assess the level of progress made so far; to understand the challenges facing the players in the sector and what we need to do differently.”

    He explained that since the commencement of the implementation of the policy in July 2014,  there have been series of consultations, aimed at ensuring that everyone is carried along so that government can fast-track the implementation of the policy and achieve the overall objectives of the policy in terms of job creation, industrialisation, local content development and reduction of pressure on our foreign exchange due to massive importation of vehicles into the country.

    Aganga, who expressed satisfaction with the level of progress made so far with the implementation of the seven-month old auto policy,  said the government and operators in the sector are focusing on local production of vehicle component parts in order to create more jobs and generate wealth for Nigerians.

    He said: “From the stakeholders meetings we have held so far, I must say that we are particularly encouraged by the level of interest and enthusiasm being shown towards the new automotive policy by Nigerians and also by Original Equipment Manufacturers (OEMs).

    “The bottom line is that everyone is saying that so far, we have exceeded our expectations. If anyone had told us that about 22 OEMS would sign into the new auto policy in less than one year of its implementation, we might not have believed it. Currently, we have about four of them that are assembling vehicles in Nigeria. We are expecting another 10 OEMs to start assembling cars in the country before the end of this year.”