The Federal Government has said that the vehicles assembled by local and indigenous auto companies are not what the government wants.
The Minister of Trade and Investment, Otunba Niyi Adebayo made the disclosure while briefing on the status of some of the signed African Continental Free Trade Agreement (AfCTA), it’s impact on the economy of the Nation and other key investment updates regarding the Buhari-led Administration.
Nigeria has nine auto manufacturers, according to the National Automotive Design and Development Council
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They are Peugeot Automobile Nigeria, Nissan Motors, Honda Motors, Innoson Vehicle Manufacturing Company, Hyundai Motor Company, Ford Motor Company, GIC Motor Companies Ltd, JAC Motors and Kia Motors.
According to the National Bureau of Statistics, Nigerians spent N1.08trn to import used cars and motorcycles between October 2018 and September 2019.
Yemi Osinbajo, Nigeria’s Vice President had said at the Nigerian Economic Summit Group (NESG) conference in 2020 that local production has not grown as desired, adding that their limited growth has led to high prices of automobiles.
Adebayo said that the companies have underperformed as expected by the Nigerian government.
He said, “As at today, vehicles are assembled in Nigeria, but they are not what we want because what we are assembling today does not give us a couple of value chain as we want.
“What we have done in the ministry is that we set our self a target. We held meetings with original equipment manufacturers and they said yes they want to set up businesses in Nigeria, however, they need protection for whatever investment they want to make.
“And based on that, we now looked into having a proper auto policy. What we have done is we now approached the Afrexim Bank who have partnered with us and they are funding. We have employed some of these international consulting firms, we have employed them. They are going to be paid by some of the grants we have received from Afrexim Bank.
“They are coming with the auto policy, it is being funded by Afrexim Bank and once that auto policy is ready we will take it to Federal Executive Council. Once FEC approves it, we will take it to the National Assembly and pass into law.
“Once it is passed into law, the original equipment manufacturers- the auto makers will now know that there is a law that protects their investments at that point they will now come and invest in Nigeria.”
The minister also disclosed ongoing plans to revive Tinapa, a business and leisure resort located North of Calabar municipality, Cross River State.
Located in the Tinapa Free Zone and Resort, the project which was built under the Cross River State Governor, Donald Duke, cost N55.88bn.
But the Minister said, “There has been an interest shown in Tinapa by a tech company. I know an approach has been made to the governor of Cross River State, with a view to seeing that they want to take it over and turn it into a tech hub. Talks are ongoing on in that direction.”
Adebayo says auto manufacturers already in Nigeria are not producing the standards the federal govt wants, and the foreign auto manufacturers are producing d standards federal govt wants are scared to invest in Nigeria, so Nigerian govt decided to borrow from Afrexim Bank to hire foreign consultants to help Nigeria formulate an auto policy that will attract and protect the foreign auto manufacturers to come and invest in Nigeria once d auto policy is made law by Nigerian law makers.
You can easily see the problem and contradictions apparent in the stated position of govt of Nigeria above.
First is the fact that Nigerian govt failed to provide or communicate d exact standards or specs it required to already existing auto manufacturers in Nigeria, including gazzeting the standards as law to be followed by all including fd foreign auto manufacturers already in Nigeria, who by d way are not complaining of losing their investments in Nigeria.
So since d already existing auto manufacturers are not complaining of losing their investments in Nigeria, why does d federal govt opted to formulate auto policy that will attract and protect new foreign auto manufacturers instead of coming up with specs and standards to guide existing domestic auto manufacturers?
The answer is that federal govt of Nigeria has some ulterior evil motive lurking in d background which I believe is totally against the already existing auto manufacturers in Nigeria. Otherwise how could anyone possibly justify spending more to attract new foreign auto manufacturers than spending less to properly guide existing domestic auto manufacturers?
If one closely takes a deeper look at d listed domestic auto manufacturers, one obviously sees what is actually problem that is making d federal govt take a higher opportunity cost than strengthen d existing domestic auto manufacturers, and that thing is Innoson Motors, located at Nnewi in SE, being number auto maker in Nigeria.