Auto Manufacturers Kick Against Plan by FG To Reduce Tariff on Imported Vehicles

The Nigerian Automobile Manufacturers Association (NAMA) has said that the planned tariff reduction on imported vehicles by the Federal Government was not in the interest of private investors and the country as at large.

The automotive manufacturers challenged the government to revive the National Automotive Industry Development Plan (NAIDP) 2013 for the growth of the automobile industry in Nigeria, stressing that policy inconsistency was the bane of growth of the country.

Speaking at the Training workshop organised by the Nigeria Automobile Journalists Association (NAJA), Mr. Remi Olaofe, the Executive Director, NAMA, wondered why the Federal Government would reverse itself on a policy that was meant to reduce foreign exchange, create more jobs for qualified personnel and make the country less dependent on importation.

The Federal Government had recently at the Federal Executive Council (FEC) announced the plan to reduce the import duties and levies on buses, tractors and other motor vehicles as contained in the recent 2020 Finance Bill.

The government said it would reduce tariff on tractors from its present 35 per cent to 10 per cent; reduction of duties on motor vehicles for the transportation of goods from 35 per cent to 10 per cent; reduction of levy on motor vehicles for the transportation of persons from 35 per cent to 5 per cent.

Olaofe lamented that while Nigeria was still dilly-dallying on the implementation of NAIDP, the neighbouring West African country, Ghana, which he said “borrowed Nigeria’s automotive bill,” had turned its own into a law with automobile companies jostling to establish plants in that country.

He emphasised that the implementation of the African Continental Free Trade Area (AfCFTA) in 2021 would further weaken the Nigerian economy as goods and products from Africa could come in without restrictions, lamenting that the country’s border was already porous.

He said: “It can’t be in the interest of this country to say to ourselves that the NAIDB bill 2013 is about to collapse. There is no single part of vehicles that is manufactured in this country. We used to produce tyres, they are no more here. We produced batteries in this country before, it has become a history. In Kaduna, we had a company assembling Peugeot vehicles, it is no more there. The assembling plants are not doing anything again.”

“There is no economy in the world where you see vehicles manufacturing that you go from zero to a Complete Knock Down (CKD), there is a process. It is a driven process. Money is involved. Automotive policy is the best we have, but we want to destroy it.”

“This is very scary. By next year, we are starting with the AfCFTA . What is going to be the hope of this country? Ghana borrowed the auto policy of Nigeria, Ghana has commenced implementation. I was in Rwanda last year to see its assembly plant, it is still this Semi Knock Down (SKD). The issue is that you cannot have an auto assembly without the market. We have got the market here.”