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Kudos to Frank Nneji and Aliko Dangote

The South East blogosphere buzzed endlessly all week as the good news came out from Emene about the resuscitation of one of the landmarks of the industrial development of the region. Industrialist and renowned transporter Frank Nneji announced the infusion of N63b into the South East economy by Africa’s leading industrialist Alhaji Aliko Dangote. Dangote placed purchase orders for 3, 500 Shacman trucks from the plant run by Transport Support Services.

Kudos to Frank Nneji and Aliko Dangote.

Transport Support Services is the new entrepreneurial platform of the man who innovated long-distance bus service in Nigeria. Nneji, Director of Transport in the Students Union government at the University of Nigeria, brought the concepts of luxury, onboard entertainment and courtesy to the buses that plied the routes from major cities West and North of Nigeria to the South East. ABC Transport became famous and grew into a big company quoted on the Nigerian Stock Exchange.

His venture into TSS has delivered an outstanding return. The Anammco plant was one of the highlights of the Shehu Shagari administration. It was and remains a major landmark in Enugu, further opening the Emene Industrial Area which hosts the Akanu Ibiam Airport.

Anammco reigned in the years of similar plants across the country based on our import-substitution industrial policy. The others included Leyland Automobiles in Ibadan, Peugeot Automobile in Kaduna, Volkswagen of Nigeria Limited in Ojo, Lagos and the Steyr plant in Bauchi. Many companies sprang up to support these industrial ventures.

The prayer is that Nigeria should sustain the Nigeria Automotive Industry Development Plan {NAIDP} through succeeding governments

 

Nigeria’s import substitution industrialisation was based on the need to find alternatives to primary products, conserve foreign exchange, promote industrialisation locally, diversify the economy and increase employment. From 1986, the introduction of the Second Tier Foreign Exchange Market and other tools to manage the economy showcased foreign exchange availability or lack thereof as the Achilles Heel of the policy. The automotive industry went belly up.

For many years, therefore, Anammco suffered the consequences of a failed automotive policy. According to Nneji, the plant was shut for seven years in the recent past until he invested in retooling it. TSS collaborated with the Chinese Shacman Autos. TSS first brought in the trucks as logistics solution providers to Dangote Industries. They then went into the local assembly based on encouraging orders from Dangote Group.

As a young correspondent for Business Magazine in the 1980s, I went around the country’s assembly plants and the budding manufacturing enterprises that had emerged to support them. There were companies working in the key areas of the vehicles of that area. A paper by the Nigerian Institute for Social and Economic Research showed that components of the motor car were sheet metal (45 percent of body weight), forged and special steel (20 percent), cast iron (10 percent) rubber (6 percent), glass (3.5 percent), aluminium (1.5 percent) and others such as petrol, grease, water (7 percent).

Nigerian firms were producing brake pads, linings, some steel components, batteries and fabrication of body parts.

The excitement about the resuscitation of the Emene plant revolves around the promise of industrialisation based on the automotive industry. The automotive industry has played a significant and contributory role in industrial development across the world. It is a source of technological and managerial innovation.

As one report noted, “Vehicle production – including passenger cars, light commercial vehicles and heavy trucks – has driven the industrial development of many countries on several continents and has been a source of incessant innovations and technological improvements. Hence, the automotive industry has become an emblem of industrialization itself. The automotive industry’s role in the economy cannot be compared with any other manufacturing industry. If it were a country, it would be the fourth-largest economy in the world.

The size of the industry’s revenues – estimated at $3,500 billion and projected to reach $6,700 billion by 2030 (McKinsey 2016) – is comparable to Germany’s gross domestic product and is greater than that of the UK, France, India and Brazil. Moreover, the industry employs approximately 9 million direct workers all over the world. The automotive industry not only encompasses vehicle production.

More than 15,000 parts and components are required to assemble a single vehicle and several industries are involved in their production, such as steel, glass, plastic and rubber, textile and electronics. According to available estimations (OICA 2017), each direct automotive sector job supports at least another five jobs in the supply chain.”

With Dangote’s order, the Emene plant is showing the promise of job creation associated with the automobile. Nneji stated, “With this {Dangote patronage}, many workers of ANAMMCO who had been at home had to come back to work. Some local suppliers of lubricants, electrolyte and the rest, had to return to business. And, because we are in Enugu, we use the Onne port to bring in components. From 2016, the Onne port has handled more than 3,000 containers of truck components for the ANAMMCO plant.”

The prayer is that Nigeria should sustain the Nigeria Automotive Industry Development Plan {NAIDP} through succeeding governments. It would provide an enabling environment for many other players to plug in as they did in the late 70s and 80s.

The investment also confirms the promise of the private sector and its merit-focused decisions. Note that the Dangote Group also has an investment in a truck assembly plant but chose to move across borders based on the performance of the Shacman trucks.

Nattering nabobs of negativism dwelt on whether the Dangote purchase order is an investment or not in the South East economy. US President Donald Trump is ecstatic about the $3 billion order for American planes from India. The Indians will not set up a plant in America. An infusion of N63 billion that enables the resuscitation of various parts of an economy is a very welcome investment. Once again, kudos to Frank Nneji and his key customer Alhaji Aliko Dangote.

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