Following President Muhammadu Buhari’s rejection of Nigeria’s Automotive policy bill, BusinessDay’s MIKE OCHONMA and Transport Editor has been gauging the heartbeat of industry stakeholders on the turn-out of events. One of such strong voices is LUQMAN MAMUDU, former director of policy & planning, National Automotive Design & Development Council (NADDC) and automotive industry expert. He fielded questions on this and a number of critical issues.
President Buhari rejected assent to the Nigeria Automotive Industry Development Plant Fiscal Incentives Guarntees Bill. What is your reaction to this.
I am not surprised because of events leading up to the rejection. Upon submission of the bill to the Presidency for assent, as usual, the president will request advice from relevant quarters to inform decision.
One of the agencies consulted was NIPC which outrightly advised the president not to sign because certain aspects of the bill unnecessarily incurred into the existing investment act. I wonder were NIPC was during public hearing on the bill.
This notwithstanding, the aspects objected to by the agency were not very central to its core purpose which is to ease Nigeria Customs Service administration and engender investor confidence. I think, it is more of insufficient understanding of the bill intent that caused the NIPC’s wrong advice.
I also thought at the time that NIPC aught to have consulted NADDC before advising the presidency because its concerns could easily have been addressed through an Executive bill for amendment If the President was allowed to sign.
My advice at this point is for NADDC, NIPC and other relevant agencies to amend the bill and quickly resubmit to the National Assembly for consideration as an Executive bill. The rejected bill was privately sponsored .This is very important because the rejection by the president will be misinterpreted by the global investment community as a rejection of policy. This definitly is not government intention.
The bill should be reintroduced fast to remedy the situation.with inputs from NIPC and others. I am sure that the president will sign if done correctly. It’s just that the legislative process is usually long but with the right push, this can happen very quickly. I know we all crave to diversify the economy and the automotive industry offer a very golden chance.
What is the implication of this especially with Nigeria as signatory to AfCFTA
As a signatory to the African Continental Free Trade Agreement (AfCFTA), it will amount to investment suicide if commitment to automotive industry is not demonstrated by some level of legislation. The Original Equipment Manufacturers (OEMs) will simply locate in more welcoming countries and flood this country with all sorts of old and new automobiles.
What can you say are the reasons for the silence by some CEOs of local auto assembly plants on the rejection of assent to the automotive policy bill by the Federal Government
They are probably not surprised on account of the lackluster attitude of the policy administrators. To renew a license alone can take up to eight months. This is a license with one year lifespan. Most of their goods are stuck at the ports while most are hesitant to open Letter of Credits (LCs). As I speak, some of the applications for renewals are still at the Federal Ministry of Finance unattended. The CEOs of these companies that have made huge investments are already sufficiently frustrated, this one is really nothing. They are probably confused.
What do you feel will be the mindset of OEMs right now sir
The OEMs will be waiting to see the next line of action and this is why a bill should be quickly re-introduced with a call for public hearing.
What do you think will happen to the investments of local assemblers
The investment will not physically be affected as the policy is neither scrapped nor suspended. It is only the quest to reassure investors which is the aim of the bill that has a temporary setback. And it is because of Nigeria penchant for policy summersalt that we encouraged it in the first place.
In other climes you really don’t need an act to pursue an automotive program. It can be achieved administration as is currently ongoing even if with stifling bureaucracy.
