Nigeria loses N550billion annually over weak auto sector

NIGERIA currently loses about N550 billion annually to its inability to assemble or manufacture vehicles, while a total of 80,000 new and 200,000 used vehicles valued at over N400 billion are imported yearly, according to the Director General of the National Automotive Council, Aminu Jalal.

Jalal  disclosed  this yesterday at the 2011 symposium on automobile and allied products organised by the Lagos Chamber of Commerce and Industry in Lagos.

According to Jalal who was represented on the occasion by a director in the council, Mr. Mahmud Lukman,   the annual installed capacity for the assembling or manufacturing of vehicles in the country stands at 150,000 units, while  at full capacity; 70, 000 skilled and semi-skilled workers would be directly employed and no fewer than 210,000  indirectly engaged in the sector.

He said that it was worrisome that despite the available human resources and population in the country, Nigeria was yet to develop the automotive industry due to what he called inconsistent government’s policies.

He alleged that lack of consistent policies on the part of the government had driven potential investors away, while private investors were closing shop in droves.

Suggesting a way forward, he said that there was the  need for government to create an enabling environment that would bring more investments into the sector, adding that government at all levels must direct all ministries, departments, agencies, local and international contractors in all sectors of the economy to source their automotive needs from local assembly plants.

“This is in line with government policy and the new patronage circular number SGF.OP/I/S.3/VII/ 250 of 12 April 2011 (annex V). Developing economies with a thriving automotive industry like Brazil, China, India, Malaysia, Thailand and South Africa have taken similar steps.

“Furthermore, NAC has set up a consumer credit fund with an initial take-off sum of N2.5 billion, to provide soft loans at 10 per cent interest rate for the purchase of made-in-Nigeria vehicles,  borrowed from NAC for the Vehicle Purchase Scheme for the military and paramilitary personnel and additional N13.67 billion to be sourced from the Central Bank of Nigeria, totaling N20 billion,” Jala said.

He also advised the government to jettison all contradictory trade policies if it truly had an intention  to develop the automotive industry, stressing that the government should increase the import duty for semi-knocked down and fully built units, which he said had made Nigeria a dumping ground  at the expense of its industries.

He alleged that this policy was denying the Nigerian citizenry the opportunity to create jobs, acquire technology and create wealth among others.

Besides, he called for special intervention funds with a mechanism that would allow easy access to such funds.

Also speaking at the event, the Senior Manager, Marketing Development, Nissan, South Africa, Mr. Johan Dippennar revealed that there were over six million cars on the road worldwide while about 40 top countries were in the manufacturing of vehicles.

According to him,  there are 58.5 million cars in the world while commercial vehicles record 19.4 million globally.

He stressed that out of the 40 countries in vehicle manufacturing, South Africa was ranked 24th with 295, 394 cars  and 176, 655 commercial vehicles manufactured.

According to him, the automotive industry in South Africa currently employs about 33,000 people with a turnover of $6.6 billion yearly, while the  component industries in the sector employs about 65,000 workers directly and about 350,000 indirectly.

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BY YETUNDE EBOSELE

Source: The Guardian

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