Nigeria’s automakers have called on the Federal Government to sign the National Automotive Industry Development Plan (NAIDP) into law to reposition the automotive industry for economic growth and development.
This was contained in a communique issued at the maiden Nigeria Auto Industry Summit (NAISU) organised by the Nigeria Auto Journalists Association (NAJA) in collaboration with the National Automotive Design and Development Council (NADDC).
They urged the government to ensure that all agreements reached during the signing are fully implemented. According to the communique, governments at all levels must lead by example by patronising vehicles assembled in Nigeria.
This would help to conserve FX and create employment through auto assemblers who have invested heavily in Nigeria’s economy. The communique revealed that stakeholders reached the above agreement in response to the low patronage faced by local automakers.
“Government can drive compulsory patronage of locally assembled and manufactured vehicles by all government functionaries, establishments, agencies and parastatals and this can be achieved using an executive bill.
“The government must ensure that all imported used vehicles, including salvaged, must be accompanied by certificates of integrity by originating countries.
“The government should through its fiscal and monetary policies, tackle inadequate access to finance; take a second look at interest rates offered by Nigerian banks which are significantly higher compared to other countries,” automakers requested in the communique.
They called for the restriction of the inflow of used vehicles to ensure a balance between industry needs and consumer preferences for Nigeria to reap automotive industry benefits.
They also requested a review of the zero differentials between imports of fully built-up (FBU) and Completely Knocked Down (CKD) commercial vehicles, which presently stand at 10 per cent.
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In terms of the Compressed Natural Gas (CNG) drive, they agreed that it must be incorporated in the policy and existing assemblers should be given a fair chance to partake in supplies rather than the current ‘unclear processes’ used in allocating 1,000 units to a few companies.
“Government must simplify the CNG process by harmonising the workings of the Federal Ministry of Finance and that of the Nigeria Customs Service on the issue of gazetted duty-free allowance on CNG equipment,” the communique disclosed.
They urged the government to prioritise automotive parks by engaging with the Nigeria Free Trade Zone Authority and completing the Automotive Safety Test Centres across the country by 2025.
“The proceeds from the levy charged on the imported passenger vehicles should be used for its purpose, which is the development of the automotive industry, especially in the area of Vehicle Credit Scheme.
“The government should sustain and encourage import deletion as a way to discourage a situation where second-hand vehicles continue to undermine local manufacturing,” they said in the communique.
Meanwhile, to drive long-term growth, stakeholders emphasised the need for backward integration and urged the government to incentivise CKD assembly through contract manufacturing.
“Nigeria needs to join other countries that have developed their economies through investment in the automotive sector and its value chain like the production of body parts with significant local content.
“Government should midwife the emergence of a corporation that will provide shared industrial infrastructure such as punchline, press, machining, casting, stamping, fabrication, and moulding infrastructure,” it said.
It also said that legacy assembly plants should be encouraged to invest in modern and more efficient production technology and attain competitiveness through economies of scale and securing unity of purposes across all relevant agencies of government.
“The government should develop and implement an automotive raw materials and component manufacturing master plan. Tyre, battery, and glass manufacturing should be revived as a precursor to revamping local manufacture of welded parts and plastic and rubber parts.
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