“The Nigeria Automotive Industry Development Plan {NAIDP} is still in full effect. It has five main elements that we have been implementing…We are reviewing the auto policy, to send it back to the National Assembly as an executive bill”
Coming from the Director General of the agency that drives the nation’s vehicle manufacturing industry – National Automotive Design and Development Council, NADDC, Jelani Aliyu – this statement is one of the most re-assuring and hope-raising comments lately on the automotive policy.
This is mainly because when, in July 2019, President Muhammadu Buhari declined assent to the Nigeria Automotive Industry Development Plan (NAIDP) Fiscal Incentive and Guarantees Bill, it cast a kind of gloom on the industry, with some people even making bold to declare the auto policy dead.
But, a semblance of hope returned to the sector four months later. Hosting a delegation from the Nigerian Automotive Manufacturers Association (NAMA) in November, the NADDC boss dispelled rumours of the consequential death of the NAIDP.
Aliyu assured them that the bill, considered the most important follow-up to the introduction of the policy itself owing to the legal framework it would give to the initiative, would be reviewed and represented.
Giving an update in an exclusive interview last week, the Director General disclosed that the NAIDP Fiscal Incentive and Guarantees Bill would soon be returned to the National Assembly for passage, but this time, as an executive bill.
Aliyu reiterated that the passage of the executive bill and its signing into law are critical to the boosting of investor confidence. It will also enhance the collaboration the NADDC is negotiating with Jaiz, WEMA and Zenith banks, towards ensuring that Nigerians are able to purchase locally assembled vehicles with low-interest loans and down-payments of only 10 percent.
He reiterated government’s resolve to review and reinvigorate the NAIDP in the interest of intending and existing investors, the local industry and the vehicle buying public.
The Director General said NADDC, in collaboration with relevant ministries and other agencies of government, has been bringing a lot of efforts to bear on investment drive and gaining the confidence of investors – key elements of the NAIDP which are being addressed in the new executive bill going to the legislature.
“We are reviewing the Automotive Policy with a view to sending it back to the National Assembly as an Executive Bill. We are working closely with the Ministry {of Industry, Trade & Investment} and the Presidency. We have met with stakeholders and got their input to make the policy more effective,” he disclosed.
According to him, some auto manufacturers, particularly two renowned international auto brands, Volkswagen and Nissan, in collaboration with their partner in Nigeria, Stallion Motors Limited, are just waiting for the signing of the auto bill for high capacity investments and production in Nigeria.
In January 2019, the Managing Director of Volkswagen Group, South Africa & Head of Volkswagen Sub-Sahara Africa (SSA), Thomas Schaefer, had in an interview with this writer, said, “Volkswagen believes that Nigeria has the potential to be the automotive powerhouse in West Africa by just the sheer size of its population. We are also encouraged by the willingness and commitment of the Nigerian government to introduce policies that are conducive to re-establishing Nigeria’s automotive industry. Political will and vision are the keys to success.”
Schaefer spoke after the visit of the German Chancellor, Angela Merkel, to Nigeria in August 2018, during which Volkswagen signed a Memorandum of Understanding (MoU) with the Nigerian government on the return of one of the world’s largest auto makers to its former plant in Ojo, Lagos.
The NADDC DG explained that the matter of boosting purchasing power is a general economic issue that can only be addressed by general economic initiatives targeted at economic and social development in the country, such as increased skills and productivity and infrastructural accessibility.
However, “on our part, we are working on deploying a single digit auto finance scheme in collaboration with Jaiz, WEMA and Zenith banks for the purchase of made-in-Nigeria vehicles with only 10 percent down-payment and a loan term of five years.”
Aliyu said that the re-appraisal of the auto policy was an indication of government’s commitment towards pursuing the development plan to a long-term and sustainable conclusion, stressing that apart from making progress in the areas of investment promotion and market development, the council has also been working towards skills, standards, and infrastructural development.
The joint committee on industry at the National Assembly, he assured optimistically, is eager to facilitate speedy passage of the bill, when re-presented.
Reacting to the development, the Executive Director of NAMA, Remi Olaofe, confirmed that at the instance of the ministry and the NADDC, a meeting of the council and the stakeholders held on January 30, with the objective of collating the operators’ input and ensuring that everybody was on the same page.
Like the NADDC DG, Olaofe did not go into details, but sounded optimistic that as a result of the consultations and the fact that the draft stands a better chance as an executive bill, “the forward and backward steps towards the full implementation of the auto policy,” would soon come an end.
The NAMA ED lauded NADDC’s emphasis on curriculum development and the training of youths in Mechatronics with the aim of empowering them to become self-sufficient and very relevant in the technological enhancement of the industry.
Some of the auto makers represented at the meeting with the NADDC are PAN Nigeria Ltd {Peugeot}, ANAMMCO, Dana Motors, Coscharis Motors Limited, Dangote Sinotrucks, Proforce Limited, VON Automobiles Limited {Stallion Group}, CFAO Motors, Metal Mate Limited, Toyota Nigeria/JAC and a few others.
One of the participants who spoke to the Daily Sun lauded the provision for used vehicle dealers, who will, however, be selling locally driven automobiles, rather than tokunbo, the importation of which may now be more strictly restricted.
Remarkably, a similar forum was organised by the NADDC the previous day, January 29, in Abuja, for the bicycle, motorcycle and tricycle stakeholders, to review the status of the sub-sector in order to pave the way for its integration into the NAIDP.
The meeting recommended for insertion into the policy document a set of minimum criteria for establishing motorcycle and tricycle assembly plants in the country, and for benefitting from the concessions accorded to bona fide assemblers by government.
The Executive Director of Motorcycle, Tricycle, Manufacturers Association of Nigeria (MOMAN), Pastor Lambert Ekewuba, who was at the meeting in Abuja, told the Daily Sun that deliberations and recommendations arrived at, raised the hope of the sub-sector taking its deserved place in the NAIDP and the country’s auto manufacturing industry generally.
A member of the board of the NADDC, Ekewuba prayed for an enabling environment for the firms investing in the industry to thrive and avoid the challenges that rendered the earlier generation of assembly plants, like PAN and ANAMMCO moribund after years of success.
He suggested that when passed into law, the new bill should be able to galvanise and sensitise people in the ministries, departments and agencies to be on the same page with the investors in order to ensure prompt and conscientious implementation of policy directives. This will help to obviate the prevailing situation where some agencies’ excessive bureaucracy and lukewarm attitude, constitute a clog in policy implementation.
In a keynote address to the MOMAN members, the Chairman of the Governing Board, NADDC, Senator Osita Izunaso, assured that NAIDP 2014-2024 was designed to ensure growth and sustained development of the auto industry. He explained that the plan has five critical elements aimed at addressing the various challenges being faced by the automotive sector.
Izunaso, a local auto industry enthusiast, listed the elements as infrastructure development; investment promotion; standards; skills development, and market expansion. He affirmed that the primary aim of the gathering was to review the status performance, role and inclusion of the {bicycle, tricycle and motorcycle} segment into the NAIDP.
The Chairman of the automotive and miscellaneous sectoral group of the Manufacturers Association of Nigeria {MAN}, Robert Ugbaja, could not be reached for comments even after several attempts. But, his predecessor and leader of the Automotive Local Content Manufacturers Association of Nigeria {ALCMAN}, Dr. David Obi, on Wednesday, described the on-going review and reinvigoration of the NAIDP bill as very commendable and imperative.
However, Obi, who through his DVC Limited played a vital role in the success story of many genuine assembly plants years ago, reiterated his familiar argument in favour of more emphasis on complete knock-down {CKD] assembly in the executive bill. To him, CKD assembly should be mated to a strict programme of time-barred substitution of imported parts with those sourced locally.
The present {semi-knocked-down} SKD 1 and SKD 2 arrangement, according to him, encourages manipulation of government concessions to genuine auto makers by dishonest vehicle importers who disguise their skeletal facilities as assembly plants, thereby sabotaging the envisaged gains of the NAIDP.
A member of the board of NADDC, Obi said: “The truth is that in order to benefit from various government concessions as per the auto policy, many of today’s so called assembly plants import almost fully built and painted vehicles, fix just the tyres and a couple of accessories locally, and deceive government that they make them in Nigeria.
“When serious plants like Peugeot in Kaduna, ANAMMCO in Enugu, and Volkswagen in Lagos, were truly doing CKD assembly, their local content suppliers were known in different parts of the country. Peugeot, for instance, achieved about 40 percent local input through steady foreign content deletion. That is what we should be talking about in the executive bill, not SKD assembly. It is all about job creation; using the auto policy to create jobs for our children.”
Regardless of the numerous challenges, the renewed efforts at re-jigging the NAIDP document for presentation as executive bill, has ignited hope that success may be beckoning in the horizon, if only implementation would be conscientious and government leads by example, by driving patronage of locally made vehicles.
The stakeholders agree that relevant ministries and their agencies, particularly the Customs Service, have critical roles to play in facilitating the implementation concessions in favour of the domestic auto industry, as well as strict and patriotic enforcement of measures to check unfair competition from imported vehicles; both new and used.
Sun News
