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Nigeria automobile industry and local content policy

Nigeria automobile industry and local content policy

Automobiles are used to transport people and items from one location to another location. If I have to give credit to one inventor, it would probably be Karl Benz from Germany. Many suggested that he created the first true or licensed automobile in 1885/1886.

The first automobile (1885-1886) that is to say the first stationary gasoline engine developed by Carl Benz was a one-cylinder two-stroke unit which ran for the first time on New Year’s Eve in 1879.Thus, the idea of automobile in Nigeria started long before the country had her independence. The Federal government of Nigeria in collaboration with automobile companies and investors from the western world entered into agreement, spelling out terms of operation in terms of policy implementation and also mode of assisting the country in the area of technological advancement.

Based on the above agreement Nigeria allowed the establishment of six main Automobile plants, namely Peugeot Automobile Nigeria Limited (PAN), Volkswagen of Nigeria Limited (VWON), Anambra Motor Manufacturing Limited (ANAMMCO), Steyr Nigeria Limited, National Truck Manufacturing (NTM) and Leyland Nigeria Limited Ibadan (LNL). Soon after the establishment of the six automobile industries in the country, the economy of the country improved tremendously because refineries were established to refine the crude oil which is one of the natural resources the Country is blessed with.

Filling stations were built for the purpose of petroleum business, thereafter; petroleum products were easily refined and transported from one point of filling station to another to enable the automobile users gain access to petroleum products. Farm produce were easily transferred from the northern part of the country to the South, West and eastern part of the country and vice-versa. Human beings were able to travel with less stress from one location to another, compared to when man was using animals as means of transportation.

Human life and social activities became easy and simple compared to the early time when means of transportation in Nigeria existed without automobile. Thus, these automobile plants were initially set up to locally manufacture and assemble cars in Nigeria, but unfortunately most of these companies deviated from the said agreement and unilaterally engaged into importation of already manufactured and assembled automobiles to the extent that individuals and private persons can order for already used cars referred to as fairly used or “tokumbo cars” and smuggle them into the country for either private or commercial purposes.

In a journal written by Mr. Ohwojero Chamberlain and Prof. E.C. Ede of Delta State University Secondary School Abraka, Delta State and University of Nigeria Nsukka, Enugu State respectively and published by IOSR Journal of Research & Method in Education (IOSR-JRME) Volume 2, Issue 4 (Jul. -Aug. 2013), PP 11-16, it was reported and I quote “ since the year 2000, there has been tremendous decline in the production of automobile and some of the automobile industries that were established between 70s and 80s are no longer in operation, as a result of challenges that has befall them. About 75% existing automobile companies in Nigeria today deal only on car sales, about 80% of automobile used in the country today are fairly used cars popularly known as “Tokumbo” as a result of the decline in automobile production in Nigeria.”

The above situation was the case of the automobile sector in Nigeria until the year 2013 when the first indigenous, locally manufactured and assembled automobile was unveiled by Innoson Vehicle Manufacturing Company Limited founded by Nigerian industrialist, Chief Innocent Chukwuma. The first set of automobiles were IVM Umu and IVM Uzo, manufactured at the company’s Nnewi plant in Anambra State, South East Nigeria.

Thus, on the 3rd day of October 2013, the Federal Government announced the introduction of a new automotive policy aimed at discouraging the importation of wholly assembled automobile and encouraging local manufacturing, this seemed like a tall dream but was adopted unanimously and recommended by the National Conference set up by the Federal Government in the year 2014 as follows “ (a) That the policy of Buy-Made-in-Nigeria products is, therefore, commendable as this would translate to increased production activities and job creation for Nigerians. This policy should be embraced by all MDAs in all tiers of government; and ADVERTISEMENT (b) That the margin of preference policy should also be strictly enforced in the procurement processes of all MDAs at all levels of government.” However, the 2017 approved annual capital budget of Nigeria for the acquisition of automobile and other vehicular products did not reflect the local content policy.

Whereas the sum of Fifty-One Billion Nine Hundred and Twenty- Eight Million Six Hundred and Ninety-Eight Thousand Three Hundred and Thirty Eight Naira (N51, 928, 698, 338.00) only, formed the estimated total amount approved by the Federal Government, foreign manufactured and assembled automobile products got the lion share of the above amount. In a speech delivered by President Donald J. Trump of the United States of America on Friday the 6th day of October, 2017 to commemorate the American National Manufacturing Day Proclamation, he encouraged all American citizens thus ““From the founding of our Nation, from Washington to Jefferson, from Jackson to McKinley, our Nation has long understood that our strength as a country depends upon the strength of our domestic industry,” President Trump said. “We’re all better off when we make, buy, and sell more products made in the USA.” In conclusion, I urge our leaders in government to emulate other world leaders in making and implementing policies that will encourage and boost our local industries, companies, products and as well attract foreign industries and companies to naturalize and produce here in Nigeria rather than importing already made products.

Writer: Gregory Okere
Published: Oct 19, 2017
Source: dailytrust

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