Nigeria Begins Implementation Of New Automotive Plan…Joins Auto Producing Countries
The measures, which were approved by the Federal Executive Council on Wednesday,October 2, 2013, will position Nigeria in the league of auto-producing countries.
The Minister of Industry, Trade and Investment, OlusegunAganga, said with the new measures, the automotive industry would create significant, good quality employment and a wide range of technologically advanced manufacturing opportunities, among others.
Aganga spoke during a press briefing in Abuja on Thursday.
He said, “In many countries around the world, the automotive industry plays both strategic and catalytic roles in economic development, particularly in employment creation and wealth generation; small and medium enterprises development (as it relates to auto parts components and services); skills development and technology acquisition.
“An automotive industry will create significant, good quality employment and a wide range of technologically advanced manufacturing opportunities. This industrial base can then form the foundation for other modern advanced manufacturing activities. For example, commercial vehicle production will lead to the manufacture of agricultural, mining and railway equipment, military hardware and transport.”
The minister added, “With our current population and economy, our potential vehicle market is about a million vehicles a year! This is more than sufficient to support an automotive industry. We are the 7th most populous economy in the world with a growing middle class (38 million), and a potential vehicle market of one million vehicles annually.
“In South Africa, for instance, the automobile industry plan has reduced the burden on the country’s trade balance and today the country is balance of payment-neutral. Likewise, the potential for Nigeria’s automobile industry plan is to save as much as N550 billion (US$3.5 billion) through the reduction of imports. We also have the regional export potential into the West and Central African market, coupled with the availability of a large and trainable workforce.”
Aganga said the manufacture of vehicles would enableNigeria acquire the technologies of mass production, quality control, lean manufacturing, computer aided design, manufacturing and engineering, which the country could use to develop other sectors of the economy and also industrialise.
He explained, “Recognising the strategic and catalytic effects of the automotive industry in industrialisation, job creation, and wealth formation, among others, emerging economies like Brazil, China, Malaysia, India, Iran, Indonesia, Thailand and South Africa took deliberate steps to develop their automotive industry between the 1960s and the 1980s. Nigeria started about the same time in the 1970s.These countries have, however, developed well-advanced automotive industries now, in contrast to Nigeria.
“The strategies they followed, which we earlier failed to do, include a comprehensive development plan, patronage of local products, appropriate fiscal measures and consistent application of policies over the long term.These issues have all been addressed in the new measures approved by FEC. The Nigerian Auto Development plan will promote investments in the assembly of inexpensive cars in the country, at prices which Nigerians can afford, and will gradually substitute the large and growing car imports coming into the country.”
The Director-General National Automotive Council, Engr. Aminu Jalal, said many international automotive manufacturers, in particular, Toyota,Nissan, Renault and GM, had indicated keen interest to invest in Nigeria following the development of a comprehensive automotive development plan.
He said, “Nissan, Toyota and others are now conducting a feasibility study on vehicle assembly in Nigeria, assuming that a comprehensive automotive development plan will be in place. Accordingly, a holistic, comprehensive and long-term automotive development plan was therefore developed and implementation has commenced.
“The elements of the plan, which will ensure competitiveness and increase productivity of the sector are: industrial infrastructure improvements (automotive supplier parks and clusters), skills development, standards, investment promotion, market development and anti-smuggling measures.”
Jalal said the plan, which would be subject to periodic reviews, would enable the automotive industry achieve its potential for the Nigerian economy, adding that it would also revitalise and boost the existing Nigerian automotive industry.
He, however, said that this policy would not result in the banning of the importation of vehicles in Nigeria but focus on promoting investments in affordable made-in Nigeria vehicles that will in future minimise the importation of vehicles.
“At full capacity, the Nigerian automotive industry has the potential to create 70,000 skilled and semi-skilled jobs along with 210,000 indirect jobs in the SMEs that will supply the assembly plants. 490,000 other jobs will also be created in the raw materials supply industries,” he noted.
Jalal said while the plan would review tariffs on imported fully-built vehicles, it incorporated mitigation measures to reduce any price rises.
He, however, said importers could still clear imported vehicles at the old rates until 28 February 2014, provided “they can prove that they had opened a letter of credit (LC) for the vehicles before 3rd October 2013.”
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