Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, said yesterday, that a new Vehicle Credit Finance Scheme to make new cars affordable to the ordinary Nigerian would be in place in the next four months as the details of the scheme is being worked out. The Minister said that the financing scheme is a combination of palliative measures, including partnering with banks towards having a common pool of funds for on lending at concessionary interest rate of not more than 10 per cent to potential car owners.
He said it is only in Nigeria that cars are purchased on cash and carry basis.
With the new financing scheme, Nigerians will be able to buy new cars assembled in Nigeria at an interest rate of not more that 10 per cent repayable over a period of four years.
Clearing the air on the effects of the ongoing implementation of the Nigeria Automotive Industrial Plan, Aganga said that there will be no increase in the prices of cars.
The minister said, “The rumour that the Federal Government has increased the tariff on imported cars by 70 per cent is incorrect and misleading. The Nigerian Automotive manufacturers have already assured the government and all Nigerians that there is adequate stock of imported vehicles and that its members have not and will not increase the price of imported vehicles. He said that last year about 50, 000 vehicles were imported at an estimated cost of $3 billion while between January and June this year a total of 37, 000 vehicles were imported before the take off of the auto policy.
“Nigeria is the only country in the world where used vehicle were not banned following the introduction of the new automobile policy. This is because President Goodluck Jonathan, before announcing the new policy, had taken into consideration the current socio-economic conditions of the average Nigerian and would not want to come up with any policy that will inflict more hardship on them.”
He stressed that the tariff regime for the NAIDP had been structured to achieve maximum positive impact on the citizens in particular and the nation’s economy as a whole.
Aganga said, “The new automobile policy has been structured to encourage Original Equipment Manufacturers to invest in Nigeria to create jobs and develop our economy because we realised that for every car that we import into Nigeria, we are creating jobs for other countries. After consultations with all the stakeholders in the automobile industry, the government came up with different tariffs, which include zero per cent for Completely Knocked Down vehicles (CKDs); five per cent for Semi-Knocked Down 1 (SKD1) vehicles, and one per cent for Semi Knocked Down 2 (SKD2).”
He added, “We knew that because we were just starting with the implementation of the policy, there would be a gap between local production and demand. Therefore, the policy allows those companies who have keyed into the policy by investing in the establishment of assembly plants in Nigeria to help us create jobs to import the difference of what they cannot produce at 35 per cent duty.
“However, for those companies that want to continue to support the economy of other countries and help them to create jobs at the expense of Nigerians and the Nigerian economy, they can import cars at 70 per cent.”
Aganga explained that the overall objective of the Federal Government’s new automobile policy was to fast-track inclusive economic growth. He said, “The automobile industry is very strategic due to its economic benefits and overall impact on industrial, skills and technology development, job creation and foreign exchange stability, among other things. Among the 10 most populous countries of the world, Nigeria and Bangladesh are the only two countries without a successful automobile programme.
“As a country, we made a good attempt at developing our automobile sector during the administration of General Yakubu Gowon in 1972 but it collapsed due to the lack of policy consistency. In order to ensure that there is no policy somersault, the Federal Government has already taken steps to ensure that it is backed by legislation. Already, the new automobile policy has passed the first reading in the National Assembly and we are working with stakeholders to fast-track the passage of the bill into law.”
Speaking during the event, the Executive Director, Nigerian Automotive Manufacturers Association (NAMA), Mr. Arthur Madueke, said members of the association had enough stock of vehicles, adding that nothing could warrant any increase in price.
He said, “We have no plans to increase the price of cars. Our members have agreed after consultations that they will not increase the price of cars in Nigeria because currently, we have enough stock of cars to meet the country’s demand. Those that have increased or are planning to increase the price of cars want to take undue advantage of the new automobile policy to exploit Nigerians and we will not be part of that exploitation.”
Madueke added, “In 2012, the total number of new cars imported into the country was 50,000. Between January and December 2013, about 52,000 new vehicles were imported, while as at May this year, 37,000 cars have been imported.
