By Moses Akaigwe
The Auto Policy staged a hope-raising come-back to the fore recently when the director-general of the National Automotive Design and Development Council (NADDC), Jelani Aliyu. Aliyu, disclosed that the document is under review by an international firm, KPMG.
Aliyu, who was on a mission in Japan to woo the country’s auto makers to invest in Nigeria, had assured his hosts of an improved environment, because apart from other favourable factors, the NADDC had engaged the assistance of the renowned international firm to update the Nigeria Automotive Industry Development Plan (NAIDP) so as to effectively drive the development of Nigeria’s auto industry
The NADDC DG further explained that the policy document would be reinforced with the globally recognised expertise of the KPMG professionals with regards to the current pattern of global and regional automotive production and distribution.
Aliyu also informed the Japanese auto makers and OEMs that KPMG is getting good support from the African Association of Automotive Manufacturers (AAAM).
“As soon as the draft policy is done by KPMG, it shall go as an executive bill to the National Assembly. The Senate and House Committees on Industry are giving their full support towards having this reviewed policy be backed by a legal framework,” the NADDC boss said.
But, why did it become necessary to engage the services of KPMG in reviewing the Auto Policy? Aliyu was asked last week.
He explained that following the implementation of the NAIDP by the NADDC, many auto brands have set up production plants in Nigeria, adding that the agency recognise the need to address the constraints and challenges the investors are facing by beefing up the policy document.
Moreover, the DG said that new trends are emerging in the global auto industry, including the fact that OEMs are adopting regional approach to components assembly and supply, as well as the distribution of finished vehicles
There is, therefore, the need for Nigeria to key intoo the current developments
“Global Automotive OEMs are now regional in components supply, assembly and distribution of finished vehicles. They no longer constrict their operations to singular markets or countries.
They leverage resources from various regional and overseas countries and sell across borders. That is why it is imperative for Nigeria to develop its automotive industry by being able to plug into that international supply chain and distribution ecosystem:
“In addition to supplying vehicles for the nation’s local market, our automotive sector must be able to strategically leverage the global components supply chain and also feed into it.
“Emerging trends in global environmental sustainability, advanced technological solutions and new patterns ownership, access and usage of mobility are rapidly shaping the industry and bringing e-mobility, artificial intelligence and ride sharing.
“The African Continental Free Trade Area {AfCFTA} also, provides a fantastic opportunity for Nigerian automotive industry to both leverage from resources and add value to markets across the continent.
“That is why the revision of the NAIDP and the Auto Policy must be done with a concrete understanding of these current and emerging financial, technological and social trends to make the automotive sector robust within our borders and relevant on the global level.
“KPMG is an international firm with both the full grasp of these global developments and an excellent understanding of the Nigerian situation, this makes it the perfect group of professionals with the right set of capacities and experience to strategically review and enhance the NAIDP and Auto Policy, for the advancement of the nation’s Automotive Industry.”
Aliyu highlighted some of the draft key areas of the review which are aimed at further boosting the financial advantages of local production/assembly.
They include clear import duty differential between locally assembled vehicles and those imported fully built, tax waivers, dedicated customs corridors/services, provision of single digit capital financing for both manufacturers and buyers; and mandatory government patronage – all in favour of local production/assembly.
He listed some of the companies that were encouraged by the NAIDP to invest in the domestic auto industry as Honda West Africa, Nissan/Stallion, Toyota/Elizade, Mitsubishi/CFAO, Suzuki/Boulos, Isuzu/Kewalrams and Yamaha/CFAO.
“These companies are already assembling vehicles in Nigeria as a result of the implementation of the National Automotive Industry Development Plan, by the NADDC,” Aliyu said, explaining that a stronger policy passed into law with Presidential assent, would be reassuring to them and other intending investors.
The visit, according to him, also provided a veritable opportunity to get input from the multinational corporations so that the reviewed Auto Policy would clearly address concerns and requirements to make Nigeria a viable destination for investment as per the modern pattern of global Automotive production, components sourcing and finished product distribution.
He said it is a flawed assessment of the situation in the domestic auto industry to say that the NAIDP had failed.
“There are many successes achieved so far in the automotive industry. Successes as a result of the huge efforts of the NADDC, the Ministry of Industry, Trade, and the very many investors who are actively assembling vehicles in many states of the federation, such as Innoson Vehicle Manufacturing Company in Nnewi, Elizade, GAC Motors owned by the CIG Group, Lanre Shittu, Dangote-Peugeot, and Dangote-Sinotruck.
He listed others as PAN Nigeria, Honda, Mikano/Geely, Nord, Kia, Stallion/Hyundai, Origion Motors, Jet Sysytems Motors, Max e, Iron Products, Suzuki and more
The NADDC has consistently assured that the Nigeria Automotive Industry Development Plan (NAIDP) Fiscal Incentive and Guarantees Bill passed some years ago by the National Assembly, but refused assent by the President, would being reviewed in the interest of the sector.
Aliyu disclosed in Japan that after the review by KPMG, the document would be sent back to the National Assembly for priority consideration, but this time, as an executive bill.