A
bill seeking to enable the production and assembly of cars and tyres in Nigeria
as well as the provision of tariff incentives and income tax reliefs on all
automobile and automotive components passed through second reading on the floor
of the Senate yesterday.
Tagged:
‘Nigerian Automotive Industry Development Plan (Fiscal Incentives, Assurances
and Guarantees) Bill’, the bill which is meant to strengthen the Nigerian
automotive industry development plan, will among others, promote a sustainable
and competitive automotive industry.
It
is also meant to provide an enabling environment for the survival of existing
assembly plants, revive the tyre industry, herald Nigeria's industrial
revolution plan using the automotive sector as a key component to diversify the
economy and also generate
revenues through industry and manufacturing.
Leading
the debate on the bill, Senate Leader, Victor Ndoma-Egba, said automotive
industry played strategic roles in the economic development of many countries
especially in the area of job creation, enhancement of Gross Domestic Product
(GDP), development of small, medium and micro-enterprises, innovation, skills
and technology.
According
to him, International Organisation of Motor Vehicle Manufacturers had reported
that the auto industry directly employs over nine million people, representing
five per cent of the world's total employment in the area of manufacturing. He
added that South Africa's automotive industry for instance, contributed seven
per cent of GDP and 12 per cent of exports to the country's economy, disclosing
that it is the second largest employer of labour in that country.
He
recalled that Nigeria's automotive industry comprising Peugeot Automobile of
Nigeria (PAN), Volkswagen among others, in their hey days, produced no fewer
than 150,000 automobiles at an estimated value of N450 billion and employment
capacity of 20,000 adding that Nigeria had the local capacity to meet all needs
relating to tyre production in the 1960s.
He
regretted that the industry crashed in the mid-80s as a result of
uncomplimentary government policies resulting in the collapse of capital
utilisation in all assembly plants and consequently opened doors for
importation of fairly-used vehicles.
Ndoma-Egba
further recalled that vehicles worth whopping N600 billion, three-quarter of
which he said were second-hand products, were imported into the country in 2012
only, lamenting that Nigeria's tyre plants have run out of business, therefore,
tyres estimated at the value of over N100 billion are being imported into the
country every year.
He
added that whereas the current operations of Nigeria's automotive industry was
limited only to assembly of commercial vehicles, the country at the moment,
needs car assembly as well as production facilities that would enable it
benefit from global potentials of automotive industry.
While
some senators who contributed to the bill, noted that it would be difficult for
local automobiles to compete with imported products especially in the face of
the country's epileptic power supply, others said it would improve and
resuscitate steel industry as well as enhance the training of technologists and
engineers which they said would have multiplier effects on other sectors of the
economy.
In
his remark, Senate President, David Mark, said whereas the bill was a good one,
the realisation of the objectives would remain a tall order because power
supply in the country has shown no sign of improvement.
"On
paper, this is an excellent bill and there is absolutely no doubt about it, but
what is more important is that it is not just this bill alone that will solve
the problem of the automotive industry. Beyond this bill, practically on
ground, we are not just prepared because no investor is going to put his money
here if you cannot guarantee him constant power.
"If
he is going to run on generator for 24 hours, he will never be able to compete
in the international market. It is not a matter of producing rubber for
Michelin, it is beyond that. DICON, which is in Kaduna today, was established
the same time with the one in Brazil and India. Today, the equivalent in Brazil
is building ships, aircraft, armoured cars, while DICON in Nigeria is producing
furniture," Mark lamented.
Thisday
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