Imported vehicles smashed by a Caterpiller in the port
Nigeria’s automotive sector regulator, National Automotive Design and Development Council (NADDC) last week proposed 100 per cent import tariff for Fully Built Units (FBUs) and 125 per cent for used cars.
Recall that the Federal Government had in November 2013, raised duty and levy payable on imported new and used cars from 20 to 70 per cent, and zero per cent on the completely knocked down (CKD) units that local assembly plants require.
The proposed tariff hike was disclosed by Mr Farouk Umar, Director, Policy and Planning, NADDC, in Abuja at the Stakeholders’ Review on Draft Automotive Policy and Nigerian Automotive Industry Development Plan (NAIDP), while listing some proposed amendments.
The stakeholders’ dialogue was organised by the Ministry of Industry, Trade and Investment, in conjunction with the NADDC to gather stakeholders input for a comprehensive review of the draft bill.
The Draft Automotive Bill was passed by the National Assembly in 2018 and presented to the Presidency for consideration and assent, but was returned to NADDC due to several issues raised by key stakeholders.
In an overview, Umar listed other proposed amendments to the policy and NAIDP to include proper definitions for what constituted Semi Knocked Down (SKD), and Completely Knocked Down (CKD).
In order to boost local content, he said that the NAIDP would include plans to ensure that all licensed assemblies achieved a 20 per cent local content inclusion target within three years from the adoption of the review.
“Failure to comply with the above provision will attract increased tariff as determined by the council. The plan should make all necessary provisions for the bicycle, motorcycle and tricycle assembly to thrive,’’ he said.
Umar said that the policy and plan would be amended to include the positions of all stakeholders that aligned with the NAIDP development objectives.
He said that the NADDC protections list of locally assembled vehicle should be populated with vehicles at CKD level that are able to reach an annual volume of 5,000 units.
He said it included development of a basis for determining local content contribution which would be largely based on value addition and labour fractions, and a system for yearly evaluation of same.
According to him, local assemblers will strengthen local suppliers with regards to qualitative, technological and productive aspects.
He also proposed detailed global analysis of policies and practices of countries with buoyant automotive industry to ascertain the proper balance to ensure change in tariffs from time to time to boost manufacturing sector.
Earlier, NADDC Director-General, Mr Jelani Aliyu, had explained that the draft policy was re-inaugurated in 2013 and a definite plan for implementation, while NAIDP was announced with clear fiscal guidelines and programmes.
The NAIDP, which was to run initially for 10 years with periodic properly phase reviews, has its main objective to bring back vehicle assembly operations and develop local content.
According to him, Nigerians spend N8 billion yearly to bring in vehicles including trucks, buses, pick-up and others.
Aliyu said that the NAIDP 2014-2024 was inaugurated in 2013 to revive vehicle manufacturing in Nigeria with five cardinal points including investment and infrastructural development.
Meanwhile, the NADDC has also tasked the automotive stakeholders to make concrete input to amend the Draft Automotive Policy and Nigerian Automotive Industry Development Plan (NAIDP) to stimulate economic growth in the automobile industry.
Mr. Adeniyi Adebayo, Minister of Industry, Trade and Investment, gave the charge at the Stakeholders’ Review.
In an address, Sen. Osita Izunaso, Chairman, NADDC Governing Council, said the stakeholders meeting to review the policy and NAIDP was timely in view of the efforts in getting the bill passed by the 8th National Assembly.
He said that the bill could not get Presidential ascent due to observed short comings.
“It is therefore, our hope that the calibre of the people that gathered to deliberate on the review of these documents will bring to bear their wealth of experience in the industry to produce a solid document,’’ he said.
According to him, the NAIDP 2014-2024 plan has five critical elements that aim at addressing various challenges facing the automotive sector.
He listed the elements as infrastructure development, investment promotion, standards, skills development and market expansion.