Recently, I read an advertorial by the “Nigerian Economic Vanguard” which appeared in some newspapers with the title “The Auto Policy: Who is Fooling Who?” In the advertorial, which was replete with negative sentiments, riddled with unsavory insinuations and full of ignorant assumptions, the group, in an apparent effort to preserve the status quo, criticized and raised a number of issues as well as objections on the new auto policy. While I am not a spokesperson for the government and would, therefore, not want to join issues with the group, two critical issues raised by the group caught my attention. The first one has to do with the reported joint venture agreements/technical partnerships between the various companies who have indicated interest in setting up auto assembly plants in Nigeria and foreign multinationals. Reacting to the said joint venture agreements, the “Nigerian Economic Vanguard” had this to say “From all the above quoted revelations, it can be seen that almost all the Nigerian Auto Franchise Owners said to be interested in assembling vehicles locally in Nigeria are signing or have entered into technical partnerships with one foreign OEM or the other- Japanese, Chinese, German or Korean. Two inferences can be made from the above excerpts: entering into technical partnership with foreign OEMs implies that those manufacturers are not confident of the Nigerian market, hence there is no direct foreign investment……………..”
On the rationale behind the joint venture agreements/technical partnerships, I personally do not see anything wrong in this. I am particularly surprised and baffled that a so called “Nigerian Economic Vanguard”, which ordinarily [at least judging superficially by their nomenclature] ought to be better informed and, therefore, in a position to know that Joint ventures/technical partnerships, just like most other business combinations, are business models, world over, usually designed to enhance technical competence and know-how, facilitate financial synergy/ consortium, develop relevant structures/infrastructures, strengthen productive/capacity building, and promote technology transfer by empowering and developing local expertise, can be the one making this inexplicable, unfounded and uninformed statement! I find the basis of the Vanguard’s objection to joint ventures/technical partnerships not only misleading, mischievous and distasteful, but also, to say the least, ludicrous and ridiculous. Contrary to the opinion espoused by the “Nigerian Economic Vanguard’, I make bold to say, without equivocation, that joint ventures/technical partnerships are well-known form of Foreign Direct Investments and a resounding mark of confidence in the local economy. Moreover, all over the world, joint venture/technical partnership is a veritable tool of industrial development and technology transfer, especially for emerging economies such as ours. It is a well-known fact that notable international auto manufacturers such as Volkswagen, GM, Ford, Mercedes, Toyota, Nissan etc., have at one time or another entered into joint ventures/technical partnerships to manufacture vehicles and develop the automobile industry in countries like Brazil, Australia, Mexico, Canada, Denmark, Sweden, Norway, China, Malaysia, South Africa, among others. For example, recently it was reported that the new 2015 C- Class range of Mercedes Benz is to be produced [not in Germany] in the German company’s South African plant. Regardless of country of origin, vehicles produced under joint venture arrangements/technical partnerships are built to meet the same stipulated specifications and required quality standards for the brands worldwide.
Another contentious issue raised by the “Nigerian Economic Vanguard” has to do with the impact of the auto policy/joint venture on job creation. The vanguard opined “what the multiple technical agreements/partnerships being entered into means is that lots of expatriate auto engineers and technicians will inevitably be imported into Nigeria due to inadequate skill levels of Nigerians to ensure that those multiple technical partnerships work out. How then will the Auto policy create jobs for the local Nigerian engineers and technicians as touted by government officials and other beneficiaries of the policy?” Let me say that it is quite ambivalent and incongruous that the same group which admitted the “inadequate skill levels of Nigerians” is the same that is complaining and condemning the employment of skilled expatriates that is meant to bridge this gap and augment the inadequacy! It must be realized that at the initial stages of the new auto assembly plants, the services and expertise of expatriates will be needed to train and develop the capacity of relevant local professionals and technicians. However, after the local engineers and other professionals would have developed the required skills, expertise and competences they will take over from the expatriates. But even at the initial stage, a number of engineers, technicians and other relevant professionals and skilled Nigerian personnel will be needed and employed in the various auto assembly plants, thereby creating employment opportunities for Nigerians.
KAYODE OLUWA
