With Nigeria having spent N550 billion ($3.4b) importing cars last year, the Federal Executive Council (FEC), on Wednesday, approved an Automotive Industrial Policy Development Plan to further encourage local manufacture of vehicles.
Announcing this to journalists at the end of the FEC meeting in Abuja, Information Minister, Labaran Maku, and Minister of Trade and Investments, Olusegun Aganga, said the success of the policy will also mean a gradual phase out of fairly used (tokunboh) cars imported into Nigeria, and employment for 700,000 Nigerians.
Aganga revealed that Nigeria spent $4.2 billion in 2010 importing cars, indicating that car import consumes the second biggest share of the country’s foreign reserves after machinery.
He explained that the policy was drawn over the last nine months and had the input of the National Automotive Council and foreign car manufacturing giants like Toyota and Nissan that are expected to soon start announcing their specific investments in Nigeria.
According to the minister, the pitfalls of similar policies in the past, like non-implementation of policies, lack of infrastructure, and inappropriate tariff regime, were considered and adequately addressed in the new one, with even the Federal Road Safety Corps (FRSC) and local vehicle assembly plants/manufacturers involved.
He disclosed that of all the most populous countries in the world, only Nigeria and Bangladesh do not have a successful automotive policy.
Aganga outlined the highpoints of the new policy to include the establishment of three automotive clusters in Lagos/Ogun; Kaduna/Kano; and Anambra/Enugu states to share resources and reduce cost of investments, as well as the development and revival of the petrochemical and metal/steel sectors and the tyre manufacturing industry to support the automotive sector.
Also, the Industrial Training Fund (ITF) is working with car-maker, Cena of Brazil, to open automotive training centres in Nigeria while two Nigerian universities have agreed to commence degree programmes in auto-mechanical engineering, all in a bid to provide adequate local manpower for the industry.
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