Why Nigerian auto sector growth is slow, by Council

The slow pace of implementation of the auto policy is making most local investors in the automobile sector think twice about their involvement, and this is slowing down the pace of growth in the sector in Nigeria.

This was the summation of Director-General of the National Automotive Council (NAC) Mr. Aminu Jalal while speaking at the maiden edition of the Automedics Autofest 2015 in Lagos on Monday.

Jalal, who was represented by the Director, Policy and Planning, NAC Mr. Lukman Mahmud, said also stated that 35 companies have been licensed by the Federal Ministry of Finance to assemble automobiles in Nigeria.

According to him, nearly all the existing assembly plants established in the 1970s and 1980s have resumed operations, some at the Completely Knock Down levels.

“From October 2013 till date, 35 companies have been licensed by the FMF to assemble automobiles in Nigeria. Already, totally green plants have commenced CKD operations. Installed capacity is 358,000 new vehicles per annum. Statistics on actual production is being compiled,” he said.

Jalal added that 90 per cent of the investments in the auto policy had been by local entrepreneurs, warning that all that had been achieved so far could be lost if the response from stakeholders became protracted.

Jalal said, “The National Automotive Industry Development Plan has a vehicle purchase scheme to leverage on the levies collected on imported fully built vehicles. This will make vehicles available to Nigerians at costs below market rates and under friendly terms.

Read also: Toyota boss says auto policy is biased

“Application for operating licence has been sent to the Central Bank of Nigeria and another to the Accountant General of the Federation to access the cumulative levies collected.”

Jalal added that until the levies would be accessed, the 35 per cent levies on used vehicles could not be applied, and described this phase as troubling for the car assemblers.

The Managing Director, Automedics Limited, Mr. Kunle Shonaike, said the Autofest was put together by the firm in partnership with the Lagos Television to showcase the depth and extent of resources available in the Nigerian automobile industry.

He said, “This is the reason we are exhibiting today, not only automobile and accessories’ companies, but also an array of other players in the automotive industry such as insurance companies, motorbike manufacturers, spare parts dealers and others.”

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