Auto policy: Adebayo, NADDC DG rekindle hope; revisit MoU with Volkswagen  

By Moses Akaigwe,

The Minister of Industry, Trade and Investment, Niyi Adebayo, and the National Automotive Design and Development Council (NADDC), Jelani Aliyu, have once again, assured that Nigeria’s automotive policy is under review in order to give it the needed boost to the local industry.  

They spoke last week during a courtesy visit to the minister in Abuja by Mr. Thomas Milz of the Volkswagen Group with which Nigeria signed a hope-raising memorandum of understanding (MoU) in 2018.

The reviewed auto policy, also known as National Automotive Industry Development Plan (NAIDP), it was learnt, would go to the weekly Federal Executive Council meeting for approval and onward presentation to the National Assembly for passage.

Both the minister and the NADDC DG were confident that with legal backing, the policy would help position Nigeria as the vehicle manufacturing hub in Africa, which is in tandem with the goals of the 2018 agreement Nigeria signed with Volkswagen.

In his remarks, the Director General of the NADDC hinted that the process of giving a legal backing to NAIDP would soon be concluded.

Aliyu described the legal framework as a critical part of the efforts by the council and the ministry to ensure that the auto industry and Nigerians generally, reap the benefits of the NAIDP.

He disclosed that an improved policy document backed by law would enhance the possibility of realising the goals of the policy, including the transition from the use of imported second-hand tokunbo, to the local production of new and affordable vehicles in Nigeria .

Aliyu explained that KPMG {the global network of professional firms providing auditing, accounting and advisory services} recently collaborated with the NADDC on the comprehensive review of the auto policy document. This is with a view to getting it passed by the National Assembly as an executive bill.  

The Director General was also optimistic that this would soon be concluded and the passed NAIDP bill assented to by the President.

Throwing more light on the process, Adebayo confirmed that his ministry was working towards taking the plan to the Federal Executive Council for approval, following which the document would be sent to the National Assembly for consideration and passage.

Approved by the Federal Executive Council under President Goodluck Jonathan, in October, 2013, with effect from July 1, 2014, the NAIDP encapsulates a range of policy measures needed to revitalise Nigeria’s automotive industry for job creation, local value addition, and technology acquisition.

It contains six components made up of standards, industrial infrastructure, local content development, skills development, investment promotion and market development.

According to the Industry minister, the policy was aimed at creating an enabling environment for key players in the industry, as the policy seeks to gain the confidence of local and external investors in the industry, with the view to attracting investments into the sector.

Adebayo assured Mliz, who is the Director in charge of Sales and Marketing at Volkswagen sub-Sahara regional office in South Africa (VWSA), that the government would continue to remove bureaucratic bottlenecks in the way of the MoU with his company and investments in Nigeria generally.

This the government would continue to do through the Presidential Enabling Business Environment Council, PEBEC, in order to make the country a progressively easier place to start and grow a business.

An inter-governmental and inter-ministerial body created by the Federal Government, PEBEC is chaired by Vice President Yemi Osinbajo.

In his comments, Milz stated that his visit to the minister was part of a follow-up process to the MoU which Nigeria signed with Volkswagen. 

“We want to understand the market, understand the customers and their needs. We also want to know the opportunities available for the customers.

“The demand is already there, but we also know that some of those cars are not new cars and that is where we see the opportunities in the future to find the market for new cars and we believe this is possible.”

Milz was confident that the steps being taken with the auto policy would further unlock the potentials of the sector in Nigeria.

The memorandum of understanding between the government of Nigeria and Volkswagen was signed in 2018 to develop a joint vision for an automotive hub that would cover the West Coast of Africa.

The MoU, which was the highpoint of the visit of the then Chancellor of Germany, Angela Merkel, to Nigeria, was signed in the presence of both the guest and President Muhammadu Buhari, in Abuja, early in September, 2018.

The then Head of Volkswagen sub-Saharan Region, Thomas Schaefer, signed the agreement on behalf of Volkswagen with Nigeria’s former Minister of Industry, Trade and Investment, Dr. Okey Enelamah, signing for Nigeria..

In the MoU, Volkswagen undertook to implement a phased approach in relation to the assembly of vehicles, initially from assembly kits with the long-term view of establishing Nigeria as an automotive hub on the West Coast of Africa.

This includes establishing a training academy in conjunction with the German government, which will train the initial employees.

The academy is also expected to also provide broader technical training in automotive skills. A comprehensive Volkswagen vehicle and service network is to be developed in the country subject to commercial viability.

In turn, the Nigerian government undertakes to accelerate the approval of the {legislative backing to the} Nigerian automotive policy, currently under consideration. 

This includes the gradual transition from the importation of used {tokunbo} cars to the manufacture and distribution of new passenger vehicles.

The government of Nigeria also committed to providing a conducive legislative environment that would encourage the manufacturing of motor vehicles in Nigeria.

A similar agreement was signed between Volkswagen and the Ghanaian government the day before, on August 31, 2018.