Viable vehicle manufacturing industry a catalyst to economic, societal growth – NAMA Chairman

Viable vehicle manufacturing industry a catalyst to economic, societal growth – NAMA Chairman

In his appraisal of President Muhammadu Buhari-led government in the last one year, MR. TOKUNBO AROMOLARAN, Chairman, Nigeria Automotive Manufacturers Association (NAMA), umbrella body of the Original Equipment Manufacturers said government input in the automotive industry may have been unnoticeably calm, but stakeholders are optimistic the Federal Government would not renege on its pledge to implement the needed policies for a robust automotive industry. Excerpts:

Q. How would you assess the incumbent administration’s temperament to the quest for a feasible automotive industry since her inception about 365 days ago?

A. The administration of President Mohammadu Buhari led-government came in barely three years after the National Automotive Industry Development Plan (NAIDP) was approved by government and no sooner the policy document was launched than the Original Equipment Manufacturers (OEMs) swung into action with a rush of investments into the sector. The policy seeks to revive domestic production of automobile, using local human and natural resources with a view to enhancing the industry’s contribution to the country’s GDP. The Impact of the policy on the automotive segment has in fact been tremendous. In fact, it is short of spectacular. As at the last count, more than 12 entrepreneurs have taken up the challenge and commenced operations, with fresh investment running to billions of Naira. There is still a long way to go in getting us to the promised land. We are looking to this administration to take it to the next level and really own it.

There has however been very little interaction or activity with this government on the policy. We understand the Honorable Minister is accessible but haven’t been able as a segment to interact with him. But being from the private sector we believe he is positively disposed to the policy. We are aware that the government is taking a critical look at the policy with a view to twicking it to achieve their own idea of development and hope they will engage the authentic stakeholders who have already invested so much in the takeoff of the sector shortly.

Q. What do you suggest the government should do especially at this time to reawaken the sector for renewed growth?

A. If the government is serious about developing our industries, it should determine the strategic industries going by the National Industrial Revolution plan and determine the incentive package it would put in place to accelerate their take-off. The incentive package would take into account the peculiar disadvantages investors face in Nigeria because of failure to develop our infrastructure and put them in a position to compete. The auto industry falls into this category. Without mincing words, a viable vehicle manufacturing industry is capable of creating huge multiplier effects for the Nigerian economy and society. Other nations with developed auto industries towed the same path. There is so much for the government to do in this respect. The previous governments merely scratched the surface of the issue by putting in place the auto policy. The government can take the credit for giving it a bite by actually putting out a strong incentive package to attract major OEMs and seeing it through. This is the way to reawaken our productive capacity and create a future for the children of the poor and down-trodden.

Q. Does that imply the government is unacquainted of the potential of the automotive industry?

A. Recently I read an excerpt of a speech from the Honorable Minister of Trade & Industry outlining the path of growth for the industry. His thoughts were in line with the Auto Policy initiatives so the government is well acquainted with the potentials of the sector and what should be done. It is a question of overcoming the inertia. Statistics compiled by various government agencies including the Nigeria Automotive Manufacturers Association (NAMA) confirmed that in that a total of about 400,000 vehicles (100,000 new and 300,000 used) valued at over N550billion were imported into the country. Now imagine if one fifth of that quantum of imports were assembled locally using available local resources; won’t the country be much better off?

Q. What then is your conviction?

A. It is my conviction the government is well aware of the positive and multiplier effects a vibrant auto sector can have on the economy. I believe they are figuring out how to assume ownership of the programme started by the previous administration and how to improve on it. This has taken the better part of one year without a formal engagement of the association of automotive manufacturers.

We are forced to believe that the government is being distracted by many nay-sayers and interested parties who wish to slow down progress in the sector. The way forward is clear, very easy to decipher if you are objective and desirous of moving this country forward. Many people have benefitted from trading and are feeding government with negative reports and holding back the pace of development of the industry.

The investors in the Nigerian Auto Manufacturing segment are indeed hopeful and that’s why there is still tremendous activity in the automotive sector in spite of very difficult operating environment of policy uncertainty, dearth of skilled labor, poor infrastructure and scarce foreign exchange.

Government needs to demonstrate in double quick time its conviction that support of the auto policy is good for this country. This will assure investors that government is a continuum and policies will not be dumped for the sake of ‘change’. Investors will only respond when they perceive a stable and supportive industrial environment.