Full text of statement by the Nigerian Automotive Manufacturers Association(NAMA) in reaction to N3.9b Senate vehicle imports during a press briefing held at the Golden Tulip, Festac Town, Lagos, Nigeria on Thursday 28th April 2016.
Successive governments in Nigeria have been battling to move our economy forward, employing different strategies and ploys to energize our docile state and create value to sustain a decent livelihood for the present and future generations of Nigerians.
As far back as 1993, the national Automotive Policy was launched to midwife the revival, development and growth of the Nigerian Automotive Industry, using local human and material resources.
In October 2013, the then government re-launched the policy under its National Automotive Industry development Plan (NAIDP). This was partly in recognition of the strategic and catalytic role many countries world over have confirmed the automobile industry plays in National Economic Development and sustenance.
The other reason derived from the necessity to diversify our mono-product economy. The mainstay of our economy has been export of crude petroleum.
The crash of the global oil market directly translated into a drop in revenue accruing to the federal government. Given the huge multi-layered public service we operate, one of the casualties of the oil price crash is the payroll of the public officers.
Many states have been unable to pay salaries, and thousands of government suppliers cannot be paid for goods or services already supplied.
In the same vein, the development of infrastructure has ground to a painful halt, and the common man is groaning under an inflationary burden that is constantly under-estimated.
It is no surprise, therefore, that the Buhari/Osinbajo government has been looking for ways to diversify the economy and develop other sectors to reduce dependence on oil revenues.
News circulated months back that the Upper Legislative Chamber was planning to procure vehicles for its members. Attention was drawn to the preference for imported fully built SUVs. The figures being brandished were mind-bugling. The attention of the budding local assembly industry was drawn to what could be a catalyst for its burgeoning take-off.
Members of the Nigerian Automotive Manufacturers Association (NAMA) were encouraged to submit their tenders and stake their claim and qualification to supply the senate with locally assembled vehicles that meet their specification. (One wonders if the specs were drawn up based on the demands of their functions or their perceived status).
About that time, the news that the upper chamber had settled for an SUV for N36.5million apiece, set to cost the government a whopping N3.9 billion was in the air. The executive arm of government expressed its disapproval for this move, urging the senate to be sensitive to the tough economic environment and requesting for a re-think to a more moderate option. The feedback from the senate was that of anger, claiming the executive had no authority to dictate what the legislative arm should appropriate for itself.
The question of who controls the excesses of the legislative arm of government continues to linger.
Believing in the patriotic spirit of our elected senators, NAMA members submitted tenders to provide the senate as well as the House of Representatives with vehicles assembled in Nigeria by Nigerians to globally accepted standards.
It was a rude shock to learn of the decision of the senate to procure imported fully built SUVs, when much more affordable locally assembled alternatives were offered. We listened to the pathetic explanation of the Senate House Services Committee Chair and were filled with nothing but pity for the country. The insensitivity of an elected body could not have been so clearly displayed, when you consider:
• The senate could have saved suffering Nigerians 40% of the eventual outlay by being patriotic and promoting vehicles assembled by extremely talented and diligent Nigerian workforce.
• The senate would have secured the continuous employment of about 4000 Nigerians for a whole year by supporting local industry. The Patronage alone may be enough to ensure its successful take-off.
• The senate would have supported about 50 component manufacturers that supply the auto industry and help create a value chain that typically impacts no less than four other sectors of the Nigerian economy.
• Had the senate not decided to starve the local industry of patronage, it would have helped grow and sustain at least 50 medium scale enterprises whose future revenue streams would flow into our corporate and personal taxation system, helping to sustain the government revenue base.
The senate has by this self-centered decision held down the automotive industry for at least four years. A pity indeed.
To attain the current state of the auto manufacturing industry, investors who believe in the future of the country and its people have put at risk resources that could have been deployed elsewhere in a globally competitive market. The future of this entity as a viable economic unit is threatened, when state resources that could be deployed to create jobs for our youths, add value to our naturally occurring material base are frittered to oil the ego of but a few. It is for reasons like this that Nigerian businessmen have enormous difficulty in convincing global OEMs to see Nigeria as an investment destination. Nigerians that undertake to fund these investments are being stabbed in the back daily by unscrupulous non-value adding importers and compromised government functionaries.
The senate may not be aware of an official circular from the office of the secretary to the Government mandating ALL government agencies to procure locally made vehicles and to procure imported vehicles only if locally assembled equivalents are not available. The Bureau of Public Procurement may wish to beam its light on the senate to determine that it does not put itself outside the ambit of their control. The senate seems to be governed only by its own rules.
We applaud the leadership of the House of Representatives, who embraced the cause to develop this nation by supporting its industries, who put aside personal aggrandizement at a tough time like this to procure locally assembled sedan vehicles. They have by this action identified with the suffering of their brothers and their families. Locally assembled Peugeot cars will roll out of the Kaduna plant over the next four months to the waiting hands of the peoples representatives. Hundreds more people will be employed and trained. Local suppliers will be engaged round the clock. They in turn will employ support staffs to carry out various sub-contract jobs and from there maintain their families. Value added to our steel products, rubber extracts, glass sheets and plastics from our petrochemical plants will flourish.
All our industry needs is that trigger. From there, we will acquire the capacity to expand our facilities and produce more units at lower prices, moving gradually towards global competitiveness and self-sustainability. All thanks to supporters of local industry like the lower house. Also Ben Murray Bruce.
Unsurprisingly, many genuine patriots have condemned the move by the senate. The following was credited to the President of the Nigerian Labour Congress (NLC), Ayuba Wabba:
“We consider appalling, insensitive and greedy the decision of the senate to acquire 108 Toyota Land Cruiser Jeeps (one for each member, less the senate president) after collecting car loans in August last year for the same purpose.
“It is equally morally despicable and shameful that they are doing this after publicly admitting that the standing committees of the senate are unable to perform their statutory functions due to paucity of funds.
“We at the Nigeria Labour Congress equally consider it a willful and grievous criminal act the inflation of the unit cost of each of the cars by over a 100 per cent, as each car supposedly cost N35.1 million instead of N17 million.”
The youths have staged demonstrations to express their disgust and gone further to demand a withdrawal of the exorbitant imported vehicles.
To whom much is given, much is expected. The people must now demand inclusive legislative action of the senate. They need to know what progressive thinking the distinguished members have to grow our industrial base and create jobs for our people, what strategies they have to formulating laws that would make our economic space more welcoming to investors and what plans they hope to put in place to creating a stable industrial environment.
The public needs to let our elected representatives to the upper legislative chamber know that it can no longer be business as usual; that they are answerable to the people.