Fate of Nigeria’s Automotive Policy under President Buhari

FEMI OWOEYE

After the 2015 General election, which brought President Muhammadu Buhari to power in Nigeria, there were speculations that the nation’s auto policy handed in by the regime of the former President Goodluck Ebele Jonathan (GEJ) would either be jettisoned or made to undergo a complete redraft.

President Muhammadu Buhari

But President Buhari, through the Minister of industries and Investments, Dr. Okechukwu Enelamah, deflated the doubts, assuring auto industry stakeholders of federal government’s resolve to take on board the New Automotive Industry Development Plan (NAIDP), as part of its industrial revolution and economic diversification chart.

To this end, National Automotive Design and Development Council (NADDC), on behalf of the federal government, re-presented the bill to the National assembly. Speedily, it passed through the House of Representatives. Though it took longer to crawl through the Senate, it was passed in November 2017.

Where is the Bill?

Notwithstanding, almost a year since the bill was passed by the National Assembly, president Buhari is yet to sign  it, a vital condition for it to enter the nation’s statutes book.

A question, therefore, begging for an answer is: Despite being an executive bill, is it possible that President Buhari had been sent the bill but simply refuses to sign it into law?

A source close to Presidency confided in AUTO JOURNAL that the bill, though passed by the two houses of National Assembly, was never transmitted to presidency.

“We are aware that the bill was passed by the Senate,” the source explained, adding, “but it was not among the bills so far transmitted to the Presidency for ascent. President Buhari has no reason not to sign the bill, especially since it emanated from the executive. If it was truly passed by the national Assembly, it should have gone into their legal department, from where it should be sent to the president. But I can assure you, the President has not received anything of that nature.”

In a telephone interview with AUTO JOURNAL, NADDC’s Deputy Director, Information, Mrs Susan Bison Taiwo, said all she knew was that the bill was passed by the senate and awaiting President Buhari’s signature.

On whether she was aware that the bill was still hanging in the legal department of the national Assembly, she responded: “All I know is that the bill was passed and is awaiting ascent of the president. That was the only information available to me. I don’t know whether or not it is still with the Senate’s legal department.”

On the prospect of the bill being signed by the president before the 2019 general election, Mrs Taiwo replied: “We cannot tell, but we are hopeful that the president will sign the bill.”

In a telephone interview, NADDC’s former Director, Policy and Planning, Luqman Mamudu, confirmed to AUTO JOURNAL that, before he left NADDC in 2017, the bill was passed by the upper and lower house, but was unsure if it was transmitted to the presidency for signature.

“At the time I exited NADDC,” he explained, “we had taken the NAIDP bill through both houses of chambers successfully. What was outstanding was the administrative process of cleaning up the bill for transmission to the president for signature.  I am not too sure that this has happened.”

Parliamentary Bill Law Making Procedure

Under parliamentary law making procedure, once a bill is passed by the two chambers of the National Assembly, a copy is forwarded to the Clerk of the Senate, who will produce a clean copy and enrol it for the President’s signature. Enrolment is when the Clerk of the National Assembly produces a clean copy of the bill, certifies it, and forwards it to the President for an ascent. The President has thirty days to sign a bill transmitted to him by the National Assembly.

Therefore, if the bill was passed since November 2017, under the law, the president is not expected to simply keep it indefinitely. He might either sign the bill into Law, or, if he disagrees with part or whole of it, veto the bill by withholding his signature. When that happens, the President must give reasons for withholding his signature, state what he wants amended and, without delay, send it back to the parliament.

In the case of the NAIDP bill, there was no announcement that the president withheld his signature, which is not expected, being an executive bill. More so, it has been more than 30 days during which the president should act on the bill, if it was transmitted to him.

Therefore, from all indications, NAIDP bill passed by the National Assembly since last year November could be hanging somewhere between the Senate and the Presidency.

Challenges of Implementing Illegal Policy

While waiting for the passage of the NAIDP bill, President Buhari’s regime has attempted to employ some of the elements of the policy, namely:  Industrial infrastructure, Skills Development, Standards, Investment Promotion and Vehicle Purchase Scheme.

Industrial Infrastructure: The administration from June 2017, acquired nearly 500 hectares of land in Oshogbo, Kaduna and Nnewi for automotive industry supplier parks.

The nation’s Vice President, Prof. Yemi Osinbajo, who was represented by Dr. Aliyu Jelani, Director General, NADDC, at the 2018 Abuja Motor Show, , reaffirmed that the Nnewi Automotive Parts Industrial Park had got its master plan and would soon be functional.

Standard: According to NADDC boss, while addressing newsmen recently, Federal government has committed about N5 billion on establishing emission test centres across the country.

He said: “NADDC has reached almost 70 per cent completion stage in the establishment of world class automotive test laboratories for emission components and materials.”

Skills Development: President Muhammadu Buhari, in his 2018 Democracy Day broadcast said his administration had entered into a collaborating with the NADDC to facilitate capacity training in the automobile industry for about 20,000 non-graduate volunteers.

According to the president, the volunteers had been selected to kick off the N-Build programme in collaboration with the NADDC and the Council of Registered Builders of Nigeria, a move in line with Chapter 2.3 of the policy.

NADDC board has also approved setting up of Public Private Partnership automotive service hubs all over the country.

According to the NADDC DG, the auto hub will have a centralised service area for the auto sector, which will serve as a yardstick for auto repairs.

Investment Promotion: Amidst criticisms from various quarters, especially members of the Senate, the regime, in line with the advice of the stakeholders, placed a ban on importation of vehicles through the land borders.

How effective the effort has been is another question, as vehicle smuggling via the land borders has continued unabated.

Even Dr. Aliyu confirmed recently that “the problem of smuggling of used vehicles from neighboring countries has not been fully curtailed.”

Vehicle Purchase Scheme: Importantly addressed in the NAIDP document are ways to boost sales, increase volumes and make locally made vehicles affordable to Nigerians, conditions by which the Original Equipment Manufacturers (OEM) would be willing to establish auto parts plants in the country. Panacea for the foregoing as contained in the policy is establishment of Auto Finance Scheme.

Although application for the scheme was said to have been with the Central Bank of Nigeria (CBN) as far back as 2016,  the nearest the nation has had is the existing product of commercial banks offering at an average of 22%, which is why FG’s ban on vehicle import through land borders seems to have suffered setback. Failure to implement Vehicle finance scheme before the ban was like putting the cart before the horse.  Finance scheme, as provided for in the policy, is meant to cushion the effect of any form of import ban.

The policy reads: “The Scheme (Vehicle Credit Purchase Scheme) will therefore act as a cushion for existing vehicle owners to trade in their vehicles for new ones while new applicants can immediately acquire new ones from local Assemblers or OEM dealers registered under NAIDP.”

Also provided in the NAIDP is a 35per cent levy on used vehicles. But that, according to Dr. Jelani, had to be suspended until the successful launch of the low-cost Vehicle Credit Purchase Scheme and the establishment of safeguard against anticipated smuggling and diversion of goods to neighboring ports.

To activate another section of the NAIDP, NADDC established an electronic online solution (www.narp.gov.ng) to capture the 17 Digit Vehicle Identification Number (VIN) obtained by the Nigeria Customs Service upon payment of duties.

But this particular step has not received cooperation of the Nigerian Custom Service (NCS), which views the new auto policy as a threat to its revenue generation drive. While efforts made by NADDC to dispel what it describes as NCS’s misunderstanding of its policy intent and perceived conflict with revenue collection has yielded little result.

“Effort is still ongoing to get NCS to share this data which will be made available to all vehicle licensing offices nationwide for verification before license issuance,” confirmed Aliyu, adding, “The programmes to precede the imposition of 35 per cent levy on used vehicle which can potentially undermine investment have not been realized, because of investors’ fear of policy reversal and delays in the integration with Nigeria Customs Service to obtain VIN records.”

Despite the aforementioned efforts by President Buhari’s administration, the only instrument that would have put paid to all challenges is an Auto policy with a legal backing.

For instance, to demonstrate their investment interest, OEMs from South Africa recently visited Nigeria.  At a meeting with nation’s vice president Yemi Osinbajo, the OEMs implored President Buhari to ascent the NAIDP bill, which they consider as an important condition for them to establish their plants in Nigeria.

What if the bill is not signed to law?

So far, it is obvious that the bill is stuck between the Senate’s legal department and Presidency, an indication that it might once again fail to take its place in the Nigerian Statutes book.

Failure to legalize the NAIDP might erode investors’ confidence in the Nigerian auto industry and also send a negative signal to existing investors and OEMs about future of automotive business in the country.

Mamudu, an ex-NADDC Policy and Strategy Director also expressed worries over the repercussion of not legalizing the auto policy.

He said: “I am afraid that if nothing is done immediately, the bill will end up unsigned for the second time.  We got up to this point before towards the tail end of the President Jonathan regime in 2014. We succeeded in getting it to his desk but it could not be signed before he left. We started all over in 2015. Foreign direct investment in the Nigeria automotive industry can never be deep enough if this bill is not fully legislated.  The fear of policy summersault is still very high. Nigeria has a penchant for it.”

This article was first published in 2018 edition of Nigeria Auto Journal, an annual publication of Nigeria Auto Journalists Association (NAJA)

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