There are indications that the Federal Government may review the auto policy being implemented in Nigeria, following the government’s awareness that low patronage is one of the challenges confronting the domestic automobile industry in the country.
As a result, top functionaries of the Federal Government may be compelled to buy made-in-Nigeria vehicles as official cars and other uses as a part of measures to boost local production of automobiles.
The nation’s automotive policy was introduced in September 2013 to curtail the influx of used and fully assembled vehicles into the country.
During opening of the 17th edition of the Abuja International Motor Fair last week, Vice-President Yemi Osinbajo, who was represented at the event by the Acting Permanent Secretary, Ministry of Industry, Trade and Investment, Mohammed Badamasuyi, disclosed that plans were already in place by the Federal Government to reconsider the controversial policy.
The policy has since inception raised skepticism among key stakeholders in the country who believe that the policy might hamper the nation’s economy.
For instance, Chief Michael Ade-Ojo, Chairman, Toyota Nigeria Limited, TNL, had last week condemned the policy, describing the initiative as a move with a week foundation that cannot stand the test of time.
Adeojo, who indicated massive jobs loss, among other demerits of the auto policy, argued that unless the auto policy was given a holistic review and properly executed with the involvement of all stakeholders, the efforts could fail again and it would hurt the nation badly.
In a bid to achieve the goal of reviewing the policy, Osinbajo said the present administration will lead the campaign of buying made-in-Nigeria vehicles through public procurement to stimulate the industry.
According to him, the government will collaborate with the local automobile industries and banks to provide interested individuals with soft loans to enable the masses to purchase locally-made cars at discounted prices and pay over a period of time.
The Vice President lamented the high cost of importing vehicles into the country and its impact on the economy, adding that the government was seeking ways to improve the auto policy to address the problem.
“Government will seek new ways of improving the Automotive Industry Development Policy in order to protect the industry. The high cost of importing fully built vehicles and used cars into the country is having serious impact on the economy. This trend would be reversed as quickly as possible,” he said.
Worried that the nation is currently importing about 400,000 vehicles annually with a total bill of about N1.2 trillion, which made the sector the second largest consumer of foreign exchange, Osinbajo however, noted that Nigeria remains a large market for the auto industry with a population of over 170 million people and a viable middle class.
“It is on record that about 10 million cars currently exist on Nigerian roads, creating a large market for spare parts,” he said.
As part of measures to improve the situation, he said the government would continue to use fiscal and non-fiscal measures to reduce the influx of the nation’s market with used cars and encourage vehicle manufacturers to establish auto assembly plants in Nigeria.
He stated that in addition, the government will ensure that existing incentives in the auto sector are implemented and new ones initiated to encourage automobile and spare parts manufacturers.
“The Federal Government would lead the purchase of made-in-Nigeria vehicles through public procurement”, the VP added.