The National Automotive Policy

THE once vibrant auto industry inNigeria became comatose following some internal crisis. But recognising  its importance to industrial development in the country,   government had promptly intervened by  resuscitating the standing Technical Committee on National Automotive Industry in 1990.

• The NAC (National Automotive Council) with inputs from the Nigerian Automobile Manufacturers Association, NAMA, and other organisations involved in the industry drafted the automotive policy for Nigeria.
• Presidential approval for the policy was given on December 30,1992 and later endorsed by the transitional council on August 10, 1993.
• The policy document was formally launched on August 23, 1993. The document provided for the establishment of the National Automotive Council as a parastatal of the Federal Ministry of Industry. Act No. 84 of August 25, 1993 backed up the establishment of the council. The thrust of the national automotive policy was to ensure the survival, growth of the Nigerian automotive industry using local, human and material resources. This is with a view to enhancing the industry’s contribution to the national economy, especially in the areas of transportation of people and goods.

The elements of the objective included:

• Provision of automotive vehicles for urban and human areas.
• Accelerated technological development of the Nigerian economy.
• Increased employment opportunities for Nigerians.
• Conservation of scarce foreign exchange.
• Establishment of integrated Automotive Industry in Nigeria.
• Standardisation and rationalisation of the Nigerian automotive industry.
• Increased private sector participation in the establishment of the auto industry.
• Technology acquisition; and
• Creating conducive operational environment through the introduction of appropriate fiscal

 policy and monetary incentives.

The 2013 new national automotive policy is an amended version of the previous one introduced in  August 1993. Its major thrust is to encourage local manufacturing of automobiles by offering protection/incentives to potential and existing local investors, while at the same time discouraging importation by raising the bar against all those who will rather export to Nigeria.

But while the importation of used automobiles is discouraged, it is not banned. Rather such imported used vehicles are  valued for duty payable with provision for depreciation according to age. However, regardless of their age, they will not be depreciated below 30% of their value as  new vehicles.

The new policy was drafted with input from the National Automotive Council, NAC and car makers such as Toyota, Honda and Nissan of Japan. The essence was to identify locations for auto manufacturing “clusters”, create auto training centres and co-operate with universities to train future auto engineers.

 

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