The Lagos Chamber of Commerce and Industry (LCCI) has said that the nation’s automotive policy is not in consonance with the Nigeria Industrial Revolution Plan (NIRP) which according to the chamber is the main industrial policy document of the current administration.
The chamber also said that, six years into the implementation of the policy, not much progress have been recorded, even as it said that the licensed vehicles assembly plants in the country are not producing enough.
The Director General of LCCI, Mr. Muda Yusuf who said this in a statement signed last week in Lagos, titled, “Automotive policy and prohibitive cost of vehicles: Need for urgent review” which was obtained by Shipping Position Daily, also called for an urgent review of the policy.
Yusuf added that the policy has failed to achieve the desired outcome, saying that it has adversely impacted cost of doing business.
“The automotive policy, in its current form is not in consonance with the Nigeria Industrial Revolution Plan [NIRP] which is the main industrial policy document of the current administration. The NIRP espouses the strategy of resource-based industrialization. Six years into the implementation of the auto policy, not much progress has been made, even though over 50 Vehicle Assembly plants licenses have been issued.
Total annual assembly of new cars in 2017 and 2018 were estimated at less than 10,000 units”, the LCCI said.
It also argued that “a review the Automotive Policy which was decreed by the Jonathan Administration in 2013 is long overdue .Six years after, the policy has not only failed to achieve the desired outcomes, it has adversely impacted the cost of doing business, welfare of the people, government revenue and the capacity of the economy to create jobs. It has caused massive trade diversion to neighboring countries. High compliance cost has put enormous pressure on firms moving them into uncompetitive positions in the face of weak institutional capacity to enforce the extant tariff regime”.
Explaining further the group noted that, “the cost of vehicles had risen beyond the reach of most citizens and corporate bodies. The impact has been negative with far reaching consequences. The automobile sector was hit by the double shock of currency depreciation [of over 80%] over the last six years and an import duty hike to 70% on new cars and 35% on used vehicles and commercial vehicles”.
According to him, the policy was an import substitution strategy aimed at reducing importation of vehicles.
“The auto policy was an import substitution industrialization strategy to reduce importation of vehicles and incentivize domestic vehicle assembly. However, import substitution strategy would only thrive in the context of high domestic value addition. It is within such a frame work that the economy could benefit from the inherent values of import substitution which includes backward integration, economic inclusion, multiplier effects, conservation of foreign exchange, job creation and reduction of import bills”, he concluded.
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