Nigeria’s NAIDP Bill: Investors’ Confidence Remains High

MESHACK IDEHEN

Stakeholders and investors’ confidence in the Nigerian automotive sector remains high, despite the interval in the passage of The National Automotive Industry Development Programme (NAIDP) Bill currently awaiting presidential assent.

Nigeria Auto Industry stakeholders 

This affirmation is coming following renewed commitment of global automotive companies and countries interested in entering into and investing in the automotive industry in Nigeria.

It would be recalled that global auto manufacturers, Volkswagen Group, recently echoed its commitment to commence the production of various brands of automobiles in Nigeria, while several other international manufacturers, including Ford, BMW, Peugeot, and Dangote – Sino Trucks amongst others continue to consolidate their positions in the nation’s automotive industry.

According to industry experts, the NAIDP Bill, when passed into law, will further attract more investments into the sector and provide more confidence to investors willing to expand their manufacturing of vehicles production activities in Nigeria.

Speaking on these developments, the Director-General of the National Automotive Design and Development Council, (NADDC) Jelani Aliyu (MFR), confirmed that the Bill is waiting for the assent of the President, adding the Bill represents a general package of incentives for new investors into the automotive sector in Nigeria.

He said the Bill is aimed at conferring special fiscal incentives for the promotion of local automotive production, including a 10% tariff on Semi Knocked Down (SKD), 0% on Completely Knocked Down (CKD), and a 10 year tax holiday for pioneer status investments, pointing out the NADDC is also working closely with the Bank of Industry (BOI) and a number of local banks to offer a vehicle finance scheme.

He said the Bill, which is the brain child of the Council, when fully implemented, will also put local content at the forefront, guarantee that the automotive businesses in the country are recognized by law and remain to safeguard investors and stakeholders in the industry.

According to him, the NAIDP Bill will also provide incentives that includes lower tariffs for completely knocked down parts that will be assembled in Nigeria, and provide greater incentives and opportunities for the tyre sub sector and original equipment manufacturing industry in Nigeria.

It will be recalled that the Federal Government in October 2013, approved the execution of the National Automotive Industry Development Plan.

According to the Director General, other objectives of the automotive policy are to restore assembly and develop local content, create employment, acquire technology and reduce pressure on the country’s balance of payment.

“ The new law will make investors in the auto industry more confident, tax holidays increased from 3 to 10 years so as to encourage newer investors as well as counter the diversion of such investments to other countries, including Ghana”, the NADDC director general said.

Aliyu said NADDC is currently also working with automotive glass manufacturer, ShatterProof and clutch disc manufacturer, Schaefler, both of South Africa, towards the entry and operations of the companies in Nigeria.

This, the Director General clarified, is part of the Council’s larger partnership with NAACAM, a consortium of automotive components manufacturers committed to manufacturing in Nigeria.

The European nation of Belarus, it was gathered, had also recently visited the NADDC in the quest to seek investment opportunities for that country in the Nigerian automotive sector, having seen the development of the Nigerian economy, and the automotive sector in particular.

According to the Ambassador of Belarus to Nigeria, Mr. Vyacheslav Brill, when he visited the NADDC, his country, the Republic of Belarus is eager to come in and invest in Nigeria’s automotive industry, particularly in the areas of agricultural mechanization and machinery such as tractors and harvesters.

The Ambassador explained that his country was also willing to invest in the production of trucks and other heavy-duty vehicles in Nigeria and urban transit solutions.

In the same vein, the Chairman and Managing Director of Volkswagen, Mr. Thomas Schaefer, whose company has already taken the initiative to commence production of vehicles in Nigeria, despite awaiting the presidential assent on the NAIDP Bill, said the company is ready to produce four of their models in Nigeria, and to introduce new mobility solutions such as, innovative ride share services.

This confidence and optimism, experts pointed out, is based on the proactive leadership currently in place at both the federal government and the NADDC.

According to Schaefer, Nigeria is good for the production of at least, 600,000 to 700,000 cars per annum, and can move up to 2,000,000 cars per year with good government policies and collaboration with the industry. Volkswagen, he said, would invest more than 100 million dollars in the first stage of its development project in Nigeria and provide more jobs.

“Nigeria has been recognized as an important segment of the African automotive sector, and with the current leadership in place, capable of advancing the growth of Africa’s automotive sector.’

On his part, the Chairman of the Senate Committee on Industry Trade and Investments, Senator Sam Egwu, assured that the laws relating to automotive industry in Nigeria will soon be passed, noting that the federal government is committed towards ensuring that the NAIDP Bill gets Presidential assent.

Egwu said the National Assembly and NADDC were closely working to ensure the speedy passage of the NAIDP Bill into law in order to promote investment drive for international automakers and original equipment manufacturers to set up manufacturing and production plants in the country.

“The NAIDP also has an auto finance scheme component that will encourage potential investors to set up auto finance scheme so that Nigerians will put little money down for brand new vehicles, including heavy duty machineries, and either pay over time or lease it for some time”.

According to the Council, stakeholders and investor’s optimism in the automotive sector in Nigeria remains very high, even though the Bill has not been signed into law by President Muhammadu Buhari, whose approval is most deserved. NADDC is very optimistic that the president will soon assent to the Bill, the council said.

“The NAIDP Bill also provides for a credit purchase scheme to ensure that funds are available cheaply as loans to civil servants, haulage and passenger commercial companies and the public that patronize made in Nigeria vehicles”, the council added.

Prince Meshack Idehen, Editor in Chief of meshackdaily.com, sent in this content in from Washington DC.

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