FG moves to drive local automotive manufacturers through policies
The federal government has announced its continued support to local automotive manufacturers in the country through policies and creating a conducive atmosphere for the sector to thrive.
Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed stated this on Wednesday at Nnewi, Anambra state during the commissioning of the three new automobile assembly plants of Messrs Innnoson Vehicle Manufacturing Company Limited.
According to her, the “Innoson Brand” is proudly Nigerian which blazed the trail in automobile assembly under the National Automobile Industrial Development Plan
She further stated that “From inception, Mr. President has consistently supported and encouraged local manufacturing in Nigerian to assist in creating more jobs as well as boosting the economy. I recall that in 2016, as part of measures to abate the spate of smuggling of automobile and its implication for the assembly industry, Mr. President had approved the restriction of importation of new and used vehicles to Nigeria.
“Also recently, in response to the outcry from local automobile assemblers on the fiscal policy measures for the industry, Mr. President had directed a review of the policy to ensure greater output in the sector. This is in line with Nigeria’s philosophy to harness optimally, the benefits of the regional integration under ECOWAS and the African Continental Free Trade Area (AfCFTA).
“Let me also inform this gathering that the Ministry of Finance, Budget and National Planning has put in place a Vehicle Registration (Vreg) Portal, to ensure that every vehicle imported or manufactured locally is captured in a Central database, using the 18 – digit Vehicle Identification Number (VIN). This is to help tackle smuggling and forestall leakages in government revenue from evasion of import duty payment on all vehicles,”
Ahmed lamented that Nigeria curently has an annual vehicle demand of about 720,000, while local production currently stands at about 15,000.
“This is not encouraging, as this means that we have to rely on imports to meet the demand for vehicles which cannot be met by the upcoming local automobile industry,” she said
Speaking further, the minister stated that, “Out of about 50 companies that were recommended by the National Automotive Design and Development Council (NADDC) to the Federal Ministry of Finance, Budget and National Planning to be given recognition as bonafide automobile manufacturers/assemblers, and to be allowed to import Completely Knocked Down and Semi-Knocked Down (CKD/SKD) components at 0% and 10% duty rates respectively, only about 15 are currently into active production.”
The minister asserted that “In line with the aspirations of achieving government’s 2021 budget objectives, bold, decisive and urgent actions would be taken where necessary to address some of the challenges of the Nigerian Automotive sector.
“In this regard, and to further encourage and nurture the Nigerian Automotive Industry to growth, Mr. President has directed that all vehicles to be purchased under approved Federal Government budgets, should be procured from locally assembled vehicles. Other tiers of government are also inspired to do the same. This is in order to stimulate growth of the industry through patronage which will sustain jobs locally rather than keep them abroad.
“Moreover, as part of the key principles underpinning the Finance Act, 2020, we shall continue to foster closer coordination of Monetary, Trade and Fiscal Policies. This is to ensure that we continually endure and evolve fiscal and monetary policies to enhance the growth and development the Nigeria’s economy, especially the automotive industry. To put in perspective, the affordability of locally manufactured vehicles for the Nigerian citizens would require support for the vehicle purchase scheme under NAIDP. We shall therefore initiate discussions with relevant authorities towards means to support the scheme to promote consumer credit and financial inclusion,” The Finance minister further stated.
