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Resuscitating the automotive industry in Nigeria

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By Chijioke Okoronkwo

By all means, the advent of automobiles has revolutionised man’s means of transportation, as vehicles remain one of the distinctive features of the 20th Century civilization.
Historical accounts indicate that automobiles appeared on Nigerian roads in the 1920s and the country has since remained a veritable market for all kinds of automobiles, ranging from cars to vans and trucks.
Six vehicle assembly plants were established in Nigeria between 1970 and 1980 but most of the plants became moribund due to heavy reliance on foreign input and collapsed local markets, among other factors
In spite of this development, economic experts insist that the automotive sector accounts for five per cent of the country’s Gross Domestic Product (GDP) and provides employment to about 10 per cent of the country’s workforce.
To showcase the potential of the automotive industry and reverse its dwindling fortunes, the National Automotive Council (NAC) recently launched its 58th Investment Profile on Automotive Components.
The event was specifically designed to highlight the investment opportunities existing in Nigeria’s auto industry and the extant raw materials.
Speaking at the launch, Mr Samuel Ortom, the Minister of State for Trade and Investment, stressed that the importance of the automotive industry to the national economy could never be over-emphasised.
“It is a vital industry in a developing economy like Nigeria. The industry provides an opportunity to diversify into sophisticated, technically demanding activities that support higher rates of economic growth,’’ he noted.
Ortom emphasised that the industry ought to be viewed as the nucleus for building a self-sustaining economy, job creation and upgrading the standard of living of Nigerians.
He, however, lamented that Nigeria’s automotive industry, even after five decades of existence, had not been receiving enough support from local manufacturers.
The Director-General of NAC, Malam Aminu Jalal, recalled that since the 1930s, Nigeria has remained a veritable market for all kinds of imported vehicles.
He recalled that the Federal Government established some vehicle assembly plants, with a view to creating opportunities within the country’s automotive industry.
Jalal said that the vehicle assembly plants included Peugeot Automobile Nigeria Ltd. (PAN), Leyland Nigeria Ltd., Volkswagen of Nigeria (VON), Anambra Motor Manufacturing Company (ANAMCO) and Steyr Nigeria Ltd.
“Sadly, all these plants still assemble vehicles with old mechanical and carburetor system.
“Modern vehicles, including trucks, are built with a new technology; they also require specially trained experts and tools for their handling.
“The problem is how can government and its agencies, especially NAC,  address the multi-faceted problems facing the automotive industry and accelerate the technological development of Nigeria using local human and material recourses?’’ he asked.
Jalal said that the council was poised to enhance the contribution of the automotive industry to the national economy, especially in skills’ acquisition and provision of local content.
However, Prof. Peter Onwualu, the Director-General, Raw Materials Research and Development Council (RMRDC), bemoaned the poor performance of the country’s automotive industry.
He particularly noted that the overall capacity utilisation of the automotive industry had dropped to about 10 per cent for vehicle assembly and 30 per cent for vehicle components’ manufacture.
“Government established the plants with the hope that they would reduce foreign exchange expenditure on vehicles; create many downstream industries and acquire technology. This is beside the anticipated creation of employment for skilled and unskilled workers,’’ he said.
Onwualu underscored the need to address the problem of local content development in the manufacturing of vehicles, adding that basic industries that would expedite local content development included plastic and rubber transformation, casting and heat-treatment industries, among others.
The RMRDC boss, nonetheless, stressed the need for Nigeria to emulate countries like Japan, India and Brazil, which backed up their technological breakthroughs with strong political will.
All the same, Dr Mohammed Haruna, the Director-General, National Agency for Science and Engineering Infrastructure (NASENI), emphasised the need for adequate manpower training in the automotive sector.
He stressed that increased manpower development efforts would aid the development of “indigenous human resources to produce more local content of international standards in auto manufacturing sector and attract direct foreign investments’’.
Haruna also disclosed that NASENI had developed a “Reverse Engineering of Mark 1, Four Stroke and Cylinder Engine components for made-in-Nigeria motorcycles“.
Mr David Oyetunji, an Assistant Director (Finance and Accounts) in NAC, who examined the challenges facing the country’s automotive industry, particularly bemoaned the decline in the people’s patronage of locally assembled vehicles.
Urging Nigerians to patronise locally assembled vehicles, Oyetunji noted:  “Most Chinese auto components  imported into the country are below the European standards; yet our people spend their time, money and energy to bring them in because most of us believe that they are better.
“Go to Nnewi, you will see the cluster of automotive industries producing various vehicle components and they suffer lack of patronage because of our people’s mentality.’’
Citing the India as an illustration, Oyetunji stressed that if India had been thinking the same way as Nigeria, the Asian country would still be solely dependent on the so-called advanced countries for its vehicle imports.
He said the rapid growth of TATA Motors in India was primarily due to the support given to the vehicle manufacturing company by the government and people of India.
“Today, TATA produces all categories of vehicles, ranging from small cars to heavy-duty vehicles,’’ he added.
From all indications, Nigeria is set to toe the line of India and other developing countries, going by the assurances given by Minister of Trade and Investment Olusegun Aganga.
Aganga said recently that a mechanism had been put in place to evolve a new policy that would give priority to the patronage of vehicles that were assembled in Nigeria.
He said the policy was part of the Integrated Mass Transit Policy of President Goodluck Jonathan’s administration.
The minister said that the policy was particularly aimed at providing efficient and affordable transportation for all Nigerians.
Analysts believe that the policy, when fully implemented, would fast-track the growth of Nigeria’s automotive industry, while creating jobs and generating wealth for the country.
They, nonetheless, stress the need for the government and people of Nigeria to make concerted efforts to save the country’s automotive industry from collapse.
Source: NAN

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