The Vehicle Finance Scheme, in addition to local vehicle assembly both of which are coming on the heels of the auto-policy of the Federal Government, has the capacity to add N100 billion to Nigeria foreign reserve, with thorough implementation of the policy.
According to the National Automotive Council (NAC), the potential value added to the Nigerian economy if all imports were locally assembled would be N100 billion.
Analysts believe that the Federal Government stands to gain from the conservative of foreign exchange if government implements the policy with transparency
More so, with about N550 billion spent on car importation annually, Federal Government has already taken a step in coming up with a structure for easier loan access that is acceptable with the WESBANK of South Africa, which would aid easier acquisition of vehicles through structured loan and discourage imports.
Experts believe that this would greatly shut down the huge amount spent on car importation, since 29 Original Equipment Manufacturers (OEMs) are already in the country for car assemblage and manufacturing.
Luqman Mahmmud, director of policy and planning in NAC, informed BusinessDay that ”the bank has a subsidiary which is the merchant bank that is based in Lagos, and would aid with all the technical services such as the treasury management and other issues.”
According to him, “we intend to put the levies that we are collecting on vehicles that are fully built in Nigeria into a pool we intend to feed into that company at equity level so that Nigerians could acquire vehicles with relative ease.”
All over the world, major vehicle manufacturers now concentrate on assembly and produce only about 30 percent of the over 2000 vehicle components, as the rests are outsourced.
Nigeria is well positioned to be a major assembly hub for international auto companies due to its installed auto capacity, large and cheap labour force, significant demand and strategic location for exports, and with consistent effort by the Federal Government to boost local manufacturing, the country would be saving a lot of foreign exchange.
Notably, a total of about 400,000 vehicles (100, 000 new ones and 300,000 used ones) valued at over N550 billion were imported into the country in 2012, according to NAC figures.
More so, at full capacity, the Nigerian automotive industry has the potential to provide 70,000 skilled and semi-skilled jobs along with 210,000 indirect jobs in the Small and Medium Scale Enterprises (SMEs) that would supply the plants.
This is an addition to 490,000 other jobs that would also be created in the raw materials supply industry, even as only 2,584 people are directly employed by all the existing assembly plants in the country at the moment.
The key components of the auto policy seeks to encourage interested foreign car makers to set up assembly plants in Nigeria, as the Federal Government through the policy is also encouraging local components makers with loans that would fast-track the development of feeder materials to boost local assembly.
According to reports from the National Bureau of statistics (NBS), the Nigeria unemployment rate still hovers around 25 percent, but analysts believe that there is a way out since 29 Original Equipment Manufacturers are already in the country, in collaboration with their technical partners, to assemble a globally certified standard of their vehicles in Nigeria and to boost local content.
Also,the Federal Government newly launched National Automotive Repository Portal (NARP) would further avail the needed data for would be investors in core areas of the auto-policy, as investors work easier with data in streamlining specific areas of investment.
“Investors would be greatly assisted,especially in areas like fuel filter, side mirrors and other car components, due largely to available data, and they could easily explore such avenue for investment,” an expert stated.
Also, Michael Omonayon, national president of the National Automotive Technicians Association (NATA) believes that the Federal Government is on the right track with the upgrading of the mechanics to meet the demands of the auto policy as global technology advances.
He said: “The new auto policy will help boost the industry’s contribution to the national economy, especially in the area of employment opportunities and wealth creation.”
So far, NAC had trained over 12,000 mechanics across the country, in order to encourage local engineers, boost capacity and advance local content promotion.
Harrison Edeh
