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Home Opinion Kick Starter with Femi Owoeye From Grin to Glare : Nigeria’s Auto Industry under President Buhari

From Grin to Glare : Nigeria’s Auto Industry under President Buhari


For the past seven years, Nigeria’s automobile Industry wondered in the wilderness of policy inconsistency and somersault.

Before President Muhammadu Buhari assumed office in 2015, things were looking up for the industry. To activate the nation’s automobile policy, former President Goodluck Jonathan’s regime, had, from 2013, set the industry on a path of growth by drafting a National Auto Industry Development Plan (NAIDP), which successfully scaled through the legislative huddles of the then National Assembly.

President Jonathan, unfortunately, declined signing the NAIDP into law.

But following his electoral victory in 2015, President Buhari, through his then Minister of Industry, Trade and Investment, Dr. Okechukwu Enalema, vowed to push the NAIDP to fruition., The bill was promptly resubmitted to the National Assembly, which gave it a legislative nod and, in 2017, transmitted it back to the president for a final signature. But that never happened.

Even Otunba Niyi Adebayo’s appointment as Minister of Industry, Trade and Investment, after PMB’s second-term electoral victory in 2019 did not help. Rather, Adebayo’s immediate action was to suspend the auto policy.  Afterwards, Adebayo, in collusion with his anti-auto manufacturing cabals, picked unfounded holes in the NAIDP document, which he knew little about, thereby sitting on it for over three years in the name of review and amendment?

It started with the Finance Act of the year 2020, which wiped out whatever the industry had achieved since 2013. The act criminally crashed import duties for fully built up(FBU) new vehicles, contrary to the provisions of the NAIDP. That singular act made FBU vehicles importation business more profitable than local assembly.

The next phrase was ‘review and consultations for amendment’, an alibi for perpetual sitting on the bill till after 2023 general election. So the bill was never signed. Neither was it ever returned to the National Assembly.

It is, therefore, sickening to know that Otunba Adebayo has been using the nation’s auto industry for image laundering.  This is the same person, who has devoted his four years as an Industry Minister to truncating the NAIDP, an essential engine for the growth of that same industry.

In his address to the Executive Course 45 participants of the National Institute of Policy and Strategic Studies (NIPSS) early April this year, Adebayo announced his plan to submit the so-called amended “Auto Policy” to the Federal Executive Council (FEC) for approval.

It, of course, made headlines, giving an impression of a milestone.

That worthless promise was not fulfilled until less than 20 days to the handing over date of Buhari’s administration.

Again he made headlines, giving an impression that the coast was clear for the auto industry in Nigeria. The news media even quoted him to have claimed that his ministry recorded appreciable achievements in the implementation of the NAIDP, which is a fallacy. On the contrary, as a result of his policy handling, the industry has slithered into despair.

NAIDP, essentially an investors’ confidence policy, is a total package, not meant to be implemented in piecemeal. In fact, licensing of an auto Finance Bank is a key content of the policy. The latter is expected to encourage Nigerians to buy locally assembled vehicles on credit at single digit interest rate. This is to help the auto assemblers to increase sales volume to a level required by the OEMs to set up parts manufacturing in Nigeria.

Otunba Adebayo and his collaborators, therefore, understood that the only way to convince PMB regime to truncate the NAIDP is to embark in piecemeal implementation and unnecessary review to frustrate the entire effort to the benefit of the career automobile importers.

As spelt out in the original policy document (NAIDP), auto assemblers were to, within 10 years (2014 to 2024) graduate from SKD (Semi-Knocked Down) kits import to CKD (Completely Knocked Down) import for local auto assembly.

The assemblers were to do what is known as parts delisting, meaning sourcing parts of the assembled vehicles locally and intensively increase local content, for instance, from 30% local and above. Licensed Assemblers unable to meet up would have lost their permits.

Had the NAIDP been signed and implemented, therefore, sales volume of locally assembled vehicles would have increased drastically. OEMs (Original Equipment manufacturers) would have been motivated to set up local content manufacturing in Nigeria, which is where the real deal.

In the process, locally manufactured vehicles would have become cheaper. Thousands of direct and indirect employment would have been generated via local content manufacturing and other segments of the value chain. That is why automotive industry is one of the largest employers of labour globally.

Nigeria would have been a leading beneficiary of AFCFTA (African Continental Free Trade Area) encompassing most of Africa.

But the tactical prevention of NAIDP from being passed into law during PMB’s eight-year regime has set the nation’s Auto Industry back to pre-2013 era.

Majority of over 50 licensed auto assemblers have shut down their assembly plants, sent employed Nigerians back into unemployment market and returned to full-time FBU vehicle importation business.

What Adebayo flaunts as NAIDP implementation could be likened to building a car without a speedometer and a brake. It’s like baking a cake without an oven.

It is clear that Adebayo and the car importing cabals are not interested in automotive manufacturing in Nigeria.

Their policy inconsistency says it all.

Truth is Adebayo’s FEC’s approval does not pave way for full implementation of the NAIDP. It means we are back to square one. Once again, the claimed amended document/bill has to be resubmitted to the National Assembly for passage, cleaning and transmitting back to the President for signature. It is at that point it becomes law and operational and Nigeria attracts investor’ confidence. That can only happen during the new regime to be sworn in on May 29, 2023.

So why does Adebayo think he could pull the wool over our eyes?

Owoeye, editor/CEO, Motoring World International

The truth is that Adebayo and his principal, President Buhari failed the nation’s auto industry. They came. They saw. They left the industry gasping.

Come May 29th, President Buhari’s 8-year term will end. He would be leaving behind a disabled automotive industry populated by stakeholders whose demeanor have metamorphosed from grin to glare.

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