LCCI Says New Auto Policy Harmful To Economy

The Lagos Chamber of Commerce and Industry (LCCI) on Wednesday kicked against the new automotive policy, saying it has the tendency to negatively affect the economy
The LCCI's President, Alhaji Aderemi Bello, made this known during the chamber’s quarterly press conference in Lagos.
He linked the uncertainties in the business environment in the second quarter to epileptic power supply, security challenges, and credit situation.
On the new policy which seeks to encourage local assembly of vehicles, the LCCI President noted that the increase in the import tariffs and levies on motor vehicles was potentially harmful to the economy and welfare of the citizens.

“It is inappropriate to begin to pursue a self reliant automobile industry with the imposition of high import tariffs, where there are fundamental supply issues to contend with.

“The creation of a sustainable automobile industry should be premised on high local value addition and capacity for backward integration, strong engineering infrastructure especially on iron rod, steel and foundries.

“Also, it depends on affordable finance of between 25 to 35 per cent cost of fund to investors, creation of sound infrastructure like power and transportation.

“A lot needs to be done on these key issues if the economy must grow at the least desired rate in the subsequent quarter.

“We urge stakeholders in the political space to manage the transition programme to boost the growth of the economy which seriously includes the cost of doing business and job creation,” he said.
Bello said that power supply, insecurity and credit were the major challenges that stifled investment and growth in the second quarter.

According to him, the chamber's 2014 Business Environment Survey revealed that key sectors in the economy like construction, agriculture, manufacturing, Oil and Gas have experienced poor growth.

“Manufacturers, especially SMEs, still have major challenges as sticky access to credit, influx of fake and substandard products, regulatory infractions, and worsening power supply.