ABUJA: Data from the National Automotive Council (NAC) presented by the United Nations Conference on Trade and Development (UNCTAD) and made available to BusinessDay shows that Nigeria spent about N6.3 trillion ($31,669million) on importation of vehicles and other motorized equipment into the country from 2009 to 2013.
Industry analysts say this capital flight which sometimes puts a dent on the value of the local currency when marched with other stronger currencies like the dollar, pounds and the euro is a challenge to the automotive policy that must be tackled headlong by the President Muhammadu Buhari administration.
This is even as some Original Equipment Manufacturers (foreign automakers) are still cautiously optimistic, about the next line of proposed investments with their local auto dealership partners despite assurances of conducive business environment by the new government.
The N6.3 trillion ($31,669million) is the summary total from 2008 to 2013 on importation of vehicles, tractors, trailers and semi-trailers, civil engineering and contractors’ plant and equipment. The National Bureau of Statistics has shown that the transport sector is one of the highest users of foreign exchange in the country.
A breakdown of the figure on the importation of vehicles, tractors, trailers and semi-trailers, civil engineering and contractors plant and equipment spent in dollar denomination value are as follows; 2008 (5,407m), 2009 (4,012m) 2010 (5,592m) 2011 (4,082m) 2012 (6,364m) and 2013 (6,212m).
In 2012 alone, a total of about 100,000 new and 300,000 used vehicles that were imported into the country alone excluding tractors, trailers and semi-trailers, civil engineering and contractors plant and equipment is valued at over N550 billion ($3.451 billion).
The federal government under former president Goodluck Jonathan while introducing the automotive policy three years ago increased the duty and levy on imported new vehicles to 35 percent each.
The objective of the National Automotive Industrial Development Plan spread over 10 years under the automotive policy according to Ngozi Okonjo-Iweala, the erstwhile minister of finance and co-ordinating minister of the economy is to bring back and encourage indigenous automotive assembly plants and to develop local content.
According to Aminu Jalal, director-general, National Automotive Council (NAC), the potential value added, if imports were locally assembled today will be N100 billion with additional value incidental if local content programs are vigorously pursued and at full capacity, the Nigerian automotive industry has the potential to create 70,000 skilled and semi skilled jobs.
The director-general said that, the impact of assembly plant will result to the creation of 210,000 indirect jobs in the SMEs that will supply the assembly plants, complemented by 490,000 other jobs that would also be created in the raw materials supply industries. He said that currently, 2,584 persons are directly employed by the assembly plants.
Under the 10 year plan of action as laid down by the past administration, between 2013 when the automotive policy came into effect and 2015, it is designed to create an environment to allow existing assembly plants to survive and attract other original equipments manufacturers (OEMs) like Nissan, Renault, GM and Toyota who had expressed interest in Nigeria.
From 2016 and 2018, the measure is expected to create a platform that would allow existing plants to grow and continue to attract other OEMs, and in particular local content suppliers. Between 2019 and 2024 according to NAC template would herald the institution of incentives for local content incorporation.
Luqman Mamudu, director of policy & planning, NAC pointed out that although the measure comes with a short-term price rise in the cost of new vehicles, it is also associated with some mitigation measures.
He said that apart from the importation of fully built units (FBUs) by auto-plants at concessionary duty which will moderate price rise.
