//
you're reading...
Issues In The News

Nigeria’s Auto Policy Gaining Traction

Nigeria’s auto policy which is aimed at the domestic provision of vehicles and increased private sector participation in establishing the auto industry is making some headway.

Based on industry reports, in H1 2014 the importation of new vehicles declined by 20%, this was mainly due to the hike in import duties on new vehicles to 35% from 20%. It is also worth highlighting the increase in production by local auto component manufacturers.

To revive this segment, the National Automotive Council (NAC) disbursed loans totalling N11.5bn (US$69.8m) to 32 companies that specialise in automobile accessory production, at an interest rate of 7.5%. Most of these companies have commenced repayment.

The policy is designed to attract substantial foreign investment inflows in the short to medium term. Iran Koven Consumer Organisation has disclosed plans to establish a car manufacturing plant in Kogi state. The plant is expected to produce 60, 000 car units annually.

Based on an Economic Review Report by the Manufacturers Association of Nigeria, the value of investments in H2 2013 for motor vehicles and assembly was N572m, representing less than 1% of total investments in the manufacturing sector. We note however, that the basic metal, iron and steel segment accounted for 64%.

Motor vehicles and assembly posted growth of 23.6% y/y in Q2 2014, though from a very low base. The segment accounted for just 0.8% of manufacturing GDP in 2013.

If the FGN successfully implements the auto policy, the country stands to gain on many fronts not least on foreign exchange and the development of auto-allied sectors such as rubber, steel and iron ore.

At Proshare, our articles, materials and contents stem from critical research work and analysis which are of world class standard that require investment. Hence, we regard them as intellectual property which should not be trampled on. Please, do not cut & paste articles, rather share with the sharing tools provided below the articles. See our Terms & Conditions and Copyright Policy for more details or Email: contact@proshareng.com to know more.

At Proshare, our articles, materials and contents stem from critical research work and analysis which are of world class standard that require investment. Hence, we regard them as intellectual property which should not be trampled on. Please, do not cut & paste articles, rather share with the sharing tools provided below the articles. See our Terms & Conditions and Copyright Policy for more details or Email: contact@proshareng.com to know more.

About TransformationWatch

TransformationWatch is an online news site founded by Henry Omoregie It is focused on keeping tabs on the Transformation Agenda set out by the Nigerian leadership in the Local, State and Federal Governments. My mission is to observe, analyze and report milestones or slowdowns in promised service delivery in all the facets of governance in Nigeria (2011 and beyond). Readership is open to all Nigerians and friends of Nigeria alike, regardless of Tribe, Religion or Political divide. We are all in this together

Discussion

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

TransformationWatch on Twitter

%d bloggers like this: