The Nigeria’s automobile industry policy re-launched in 2014 has been described as a deceit and waste of time, as it failed to follow the proper procedure.
The Group managing Director of RT Briscoe PLC, Mr. Seyi Onajide, who made the submission in an interview published in the latest edition of Nigeria Auto Journal, a publication of Nigeria Auto journalists Association (NAJA), said the policy has caused a setback for the auto business in the country
Fielding questions from the publication’s editorial team, Mr. Onajide recalled that the problems and challenges facing the nation’s auto industry today started in 2014, when the then Minister of industry, Trade and Investment, olusegun Aganga, came up with a new auto policy.
According to him, before 2014, a credit system that allowed banks to guarantee purchase of new vehicles in Nigeria was in place.
“But the minister came with the auto policy to disrupt it,” he lamented. “
In his view, although local production of vehicles is a good idea, if the right procedures are followed, the government failed to encourage production of auto components and ensures availability of credit facilities for buyers of new vehicles in Nigeria before licensing auto assembly plants.
“For instance,” he explained, “Toyota at a time was producing from Japan. Later, it decided to have assembly plants in other regions. As a matter of fact, Toyota only gives out the concept, while the assembly plants locally source for components.
“South Africa produces for the African market, because they have enough local component suppliers. I guess that was what Aganga saw, that if South Africa is producing cars, why not Nigeria too? It is a good idea, but do we have the local content suppliers? Dunlop and Michelin that should have been our suppliers have moved out of Nigeria to Ghana. A radiator company that used to be in Port Harcourt has gone down. We used to produce windscreen in Ibadan, same thing with Exide battery.”
To revive the Nigeria’s auto sector, therefore, Onajide advised the government to first encourage the local content suppliers to return and establish in Nigeria and also put in place a deliberate policy to protect them before kick-starting a car assembly plants.
“If they (component manufacturers) are not on ground,” he pointed out, “then we are just deceiving ourselves. All those companies came in the first place because they saw an opportunity in the country to thrive businesses. But they had o leave, because they were not protected. They came, trying to meet standards; but others started making substandard products. And nobody checked that. They are ready to come back if the environment is healthy and competition is fair to all.
“There are government agencies in charge of monitoring and ensuring orderliness in the business environment. What are they all doing? The law that we should make is to address all those anomalies.”
Onajide chided the government for failing to learn from the past mistakes in the process of rolling out an auto policy.
He recalled Nigeria’s pioneer assembly plants, which thrived in the 1970s through to 1980s, collapsed due to lack of protection and lack of integrated plans to develop local content.
“I believe there was no sufficient protection for the pioneer assembly plants,” adding, “Nigeri’s average tariff was the lowest among all countries that adopted automotive policy as a strategy to develop their industry at the time the most emerging economies did. The adoption of free trade policy by Nigeria in the early 80s without the need to protect the critical industrial sectors finally undermined the industry.
“Back in the 1970s, we had Peugeot Automobile Nigeria, Kaduna; Volkswagen Nigeria, Lagos; Anambra Motor Manufacturing Company (ANAMCO), Enugu; Styer Nigeria, Bauchi; National Truck Manufacturer, Kano; and Leyland Nigeria, Ibadan. These companies were privatized in 2007. But the assembly plants could not survive the harsh economic environment, orchestrated by many factors. So they collapsed.
“It was the foregoing advice we gave Aganda in 2014, when he came up with the auto policy, but he wouldn’t listen. He went ahead to merely implement the increase in tariff for new vehicles and everything went up. Where are the assembly plants now? The Tokunbo (imported used vehicles) we were trying to avoid then has now become the only alternative for Nigerians.”
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