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Disciplined Economy Will Revamp Nigeria’s Automobile Industry

The Nigerian government has been advised to maintain a disciplined economy as a key element in revamping the manufacturing sector. The sector is currently contributing … Continue reading Disciplined Economy Will Revamp Nigeria’s Automobile Industry


The Nigerian government has been advised to maintain a disciplined economy as a key element in revamping the manufacturing sector.

The sector is currently contributing 3.98 per cent to the GDP, a percentage that analysts said was too low, against an expected 40 per cent.

In a bid to boost the sector’s GDP, the Nigerian government, few weeks ago, announced plans to increase the tariff on imported cars by January 2014, a strategy that the Acting Director General, Manufacturing Association of Nigeria, Mr Rasheed Adegbenro, described as healthy for the growth of the manufacturing sector and the Nigerian economy.

“The posture of the current government is encouraging. The latest automotive policy is a good one because automobile import has topped Nigeria’s import bills, a sad note for economic planning and management,” Mr Adegbenro pointed out.

Mr Adegbenro and the Group Managing Director, Dunlop Nigeria Plc, Mr Mohammed Yinusa, were analysts on Tuesday’s Business Morning, a programme of Channels Television.

Analysing the possible impact the proposed increase in import duties will have on the economy, Mr Adegbero said that the policy would bring the expected improvement in the manufacturing sector.

“When the domestic assembling plant becomes operational and desired volume is achieved, the linkage industries to the auto sector are so enormous and the effect is that they would push up industrial production by as much as 40 per cent. This will create jobs.

“If the auto plants are able to produce the required volume, other industries producing the components required for production of a car, which are over 2,000, would benefit from the production,” he said.

Mr Yinusa stressed the need for the government to address the power issue and ensure that power is constant, as it was a backbone to such assembling.

The Nigerian government had said that the cost price of the expected vehicles would be 1.2 million Naira, a development critics said could lead to use of inferior materials in the production of the vehicles.

But Mr Yinusa dismissed the criticism saying that the law of demand and supply and competition would compel the manufacturing companies to ensure that the materials used would be of standard.

“The law of demand and supply will control the price. When competition sets in, the consumer laughs last. Share competition will push the price down,” he said.

Mr Adegbenro also emphasised that the quality of the vehicle would not be compromised, since the sector was driven by volume.

Both men, however, emphasised the need for the government to ensure that things would be done right, as laxity in the implementation of the policy would ruin the effort.

With the plan in place, the Nigerian government is looking to thread a new future that will bring the country back to an era where manufacturing will grow for the benefit of the entire economy.

The strategy is part of the government’s policies aimed at creating an enabling environment for investment in car manufacturing and provide jobs for the unemployed youths.

Car assembling in Nigeria dates back to 1959, when the UAC established a plant, through one of its departments, Niger Motors, to produce Bedford trucks using semi-knocked down kits.