THE MINISTER BELIEVES NIGERIA CAN MANUFACTURE ITS OWN VEHICLES WITHIN A DECADE.
Doris Uzoka-Anite, the Minister of Industry, Trade, and Investment, expressed confidence that Nigeria could commence its vehicle manufacturing within a decade.
During the launch of the Nigeria Automotive Industry Development Plan, attended by stakeholders from both public and private sectors, the minister emphasized plans to establish Nigeria as a significant player in the automotive manufacturing sector.
She outlined that the development plan aimed to position Nigeria as a fully integrated vehicle manufacturer within the next ten years, covering a range of vehicles from motorcycles to heavy-duty trucks.
On his part, Joseph Osanipin, the director-general of the national automotive design and development council, mentioned that the proposed policy to aid the plan was a five-year tax holiday for vehicle assemblers in nigeria. he remarked, “through such fiscal initiatives, there is a deliberate emphasis on backward integration and component production.”
Members of the automotive industry development plan implementation committee are selected from the ministries of finance, transport, and environment, as well as industry, trade, and investment. it also includes the Nigeria customs service, the manufacturers association of Nigeria, and the standards organization of Nigeria.
It’s worth noting that last year, Nigeria’s vehicle assembling industry, valued at approximately n302bn, declined significantly due to rising production costs and reduced demand for locally assembled vehicles.
According to the manufacturers CEOs confidence index, activities in motor vehicles and miscellaneous assembly deteriorated further below the benchmark (50 points), dropping from 48.6 to 46.7 points. for instance, in the second quarter of 2023, stakeholders in the sector witnessed a 17.3 percent increase in production and distribution costs, alongside a 14.7 percent rise in shipping costs. capacity utilization in the sector also decreased by 5.6 percent, leading local assemblers to reduce their workforce by 5.7 percent during the period.
Prior to 2014, when an automobile industry policy was introduced, granting licenses for automobile dealerships in Nigeria, the influx of used cars posed a threat to the gains made through partnerships between the Nigerian government and foreign car manufacturers in the 1970s.
The federal government’s automotive policy of 2014 aims to provide a framework supporting automobile companies to enhance local content and establish a vehicle financing scheme to facilitate citizens’ purchase of new cars.
However, despite the policy, the government’s reluctance to support locally manufactured vehicles, coupled with inadequate regulations, has been a significant obstacle to the industry. presently, Nigeria produces less than 10 percent of the vehicles used in the country.
Source: Techeconomy
