Nigeria’s automotive policy attracts N25.6bn investment


July 2014 Nigeria’s federal government introduced a new automotive policy to encourage the local production of vehicles, which has recorded positive results despite outrage when it was initiated.

According to the Director, Policy and Planning at the National Automotive Development and Design Council (NADDC), Mr. Luqman Mamudu, Nigeria’s automotive industry has attracted investment worth up to $128 million and an estimate $50 million has been committed on land space and infrastructure from 2013 till date.

The federal government plans to spend $78 million on land, purchase total investment in equipments for the automobile industry and also lease an assembly space for $250 000 per annum or N50 Million on the average.

A total of 37 companies have been granted licences to begin operation but not all are fully equipped to put together commercial vehicles due lack of funding. NADDC allows such companies to remain under contracts with fully established assemblers until they are able to build their own plants.

While some Nigerians view these Nigerian-made cars as sub-standard, the NADDC has done its best to redefine made-in- Nigeria vehicles and bolster its credibility. Economic Community of West African States (ECOWAS) partnered with the NADDC in order to build a framework that would promote regional automotive policy. This partnership is aimed at encouraging the use of local content in the assembling of cars and reduce dependence on foreign materials in West African countries.

The ECOWAS rule states a car can be considered made in that country if the local content used in assembling the car is above 30 percent.  Nigeria in past years had over 40 percent during the production of Peugeot series when the country had over 70 automobile component manufactures that produced items such as automotive glass, batteries, wire harness, among and the NADDC believes this feat can be achieved in modern era.

Prior to the policy commencement, in 2013, Nigeria imported 100,000 new vehicles and 300,000 used vehicles valued at over $550 billion. Currently, over 30 original equipment manufacturers have started production and some of them have started establishing assembly plants.

The Nigerian automotive industry at full capacity has the potential to create 70,000 skilled and semi-skilled jobs along with 210,000 indirect jobs in the Small Medium Enterprise (SMES) that will supply assembly plants.

However, the government needs to fix the problem of misplaced inspection by some agencies and seek agencies that have the technical ability to assess various assembling plants in the country to ascertain standard manufacturing of these made in Nigeria automobiles.

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