The history of Nigeria’s auto industry is a paradox. For three decades, the nation’s successive governments failed to key into the industry’s viability.
And President Muhammadu Buhari’s administration has made no difference. Under Buhari’s watch, Nigeria’s auto industry has been put on a reverse gear. With Ekiti State born Otunba Niyi Adebayo on the driver’s seat, the nation is making a U-turn towards becoming a dumping ground for imported vehicles.
Ironically, our West African neighbour, Ghana got the concept of auto policy from Nigeria, duplicated it, got it written in her statute books and commenced its implementation. As a result, the auto industry has properly taken off in Ghana.
And, like a broken record, Motoring World, since 2015, repeatedly warned and reported the negative actions and inaction of this administration against the auto industry.
We thought somebody was listening, especially after the National Assembly passed the Nigerian Auto Industry Development Plan (NAIDP) bill in 2017.
We, however, got apprehensive after, for 18 months, the bill remained unsigned. No words from the presidency until Buhari’s first tenure ended. Again, he won the 2019 election. Stakeholders/OEMs, who had invested billions of dollars in assembly plants, were getting nervous.
They were proved right. It was not until after Buhari was sworn in for his second tenure, that he declined signing the bill, claiming it contained certain errors.
Following the appointment of Adebayo as Minister of Industries, stakeholders, including some of us in the motoring media, decided to, once again, give the government benefit of the doubt. Being an indigene of Ekiti, a state regarded as fountain of education and knowledge, we believed Adeniyi would not need any microscope to make out the employment and industrial prospect of having a thriving automotive industry.
He even invited the auto industry stakeholders to a meeting, where he requested for inputs. What followed was an announcement that NAIDP had been suspended. Despite the shocking proclamation, Adebayo still assured Nigerians that the government was at the brink of sending a fresh bill to the National Assembly that would contain the inputs and views of auto stakeholders, private sector operators and interests of Nigerians in a bid to achieve inclusive industrialization growth in vehicle manufacturing in Nigeria.
While we were waiting, the Nigerian Custom Service sneaked into the Presidency a memo recommending a removal of all the protective tariff for the local automobile assemblers.
The Minister of Industry was said to be present at the National Executive Council meeting at which the killer recommendation was approved and added to what is known as finance bill. By the way, it has been pushed through the national assembly and signed by the president.
By implication, the nation can once again be flooded with imported new and used vehicles. Because manufacturers from their countries of origin are able to achieve a high and profitable volume for export, they can afford to flood Nigeria with cheaper vehicles that indigenous assemblers cannot compete with.
By so doing, the government is making local auto manufacturing unprofitable and unfeasible. For the nation’s auto industry stakeholders, it would be more profitable to simply import Fully Built Up (FBU) vehicles for sale in the country. Auto assembly plants would simply shut down and sack their factory employees. Asia, Europe, America and even South Africa will gain. Even Ghana, our neighbour will gain. But Nigerian unemployed populace will be the final losers.
At last, enemies of the nation’s auto industry have recorded a vital victory. They love importation, as against employment generating industry.
Management of the Nigerian Custom Service (NCS) is happy for winning the first round of their age-long battle to kill the industry.
Our hope is now turning to an illusion.
Reacting before the Finance Bill was passed into law, the Executive Director, Nigerian Automotive Manufacturers Association, Remi Olaofe described it as a threat to NAIDP and the nation’s Auto Policy.
According to him, it will create a negative perception of policy inconsistency that could result in reversal of huge foreign investments being channeled into the nation’s auto sector.
He added: “It will create envisaged pressure on the already scarce foreign exchange with its attendant pressure on our trade balance, worsen unemployment with layoffs and business failures and return Nigeria to dumping ground for junk imported used vehicles.”
Auto industry watchers have also expressed shock as to why any responsible government would permit such in an economy that has been weakened as a result of COVID-19 pandemic.
Reduction of tariffs on used and new FBU vehicles at this auspicious time is tantamount to a deliberate attempt to kill the nation’s auto industry.
The opportunity embedded in a country that is engaged in auto assembly and manufacturing cannot be taken for granted.
To reinforce its rhetoric at moving the nation’s economy forward, the government should have devoted energy towards creating necessary enabling environment for auto auxiliary and assembly plants to thrive.
Reduction of duties on vehicles made/assembled abroad will not only support employment in other countries.
It is capable of destroying the efforts made to revive the nation’s auto industry since 2013.
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