In the last two decades, there has been a significant increase in the development and advancement of the automotive sector in Africa. However, some problems need to be addressed to bring out the full potential of this sector, and that is precisely what Nigeria needs.
Looking at the past, the National Automotive Industry Development Plan (NAIDP), launched in October 2013, as a first measure to promote the growth of the automotive sector, was quite useful because, under this plan, the installed capacity of the assembly increased from 89,000 to a promising 430,000 per annum.
However, some constraints persisted, hindering growth and constraining the production capacity. The most critical constraint was the M&E (monitoring and evaluation). M&E is crucial to implement a policy effectively and achieving the desired results. But, there was no review in 2018, when the plan turned five years old.
As a result, a large number of problems appeared. And it seemed that the entire plan was directionless, so those who hated this policy found a quick opening to mobilize against it.
The Ministry of Finance and The Nigerian customs service painted the concessionary and protective tariff lines in favor of wholesale import of any vehicle. And today, Nigerian streets are jam-packed with used or second-hand vehicles. The unemployment rate increased. Almost 5000 employees lost their jobs, and most plants are now useless.
Now it’s easier to import new vehicles since the tariff is cheaper than manufacturing one.
Due to inconsistent policies, Nigeria, which once established a track record for producing parts and components, now failed to keep that record. The NAIDP, however, addressed this issue by providing provisions for Automotive Suppliers. Unfortunately, this provision is now abandoned. The main problem that led to the failure of NAIDP was the implementation phase. Had more care and tight controls been in place, the M&E report could’ve been made, and that would’ve erased the problems early on rather than causing a massive failure.
This caused the loss of 5000 jobs and increased imports harming our national reserves. Moreover, due to the failure of the Nigerian Government, most of the OEMs, including AAAM (Association of African Manufacturers), shifted their manufacturing and assembly to other African countries. AAAM initially wanted to make Nigeria Africa’s automotive hub, but all this went down the drain.
The policy administrators had an essential role in the failure of this policy. They did not make any effort to review this policy or to convince the Government to affirm the automotive investment bill. The Government only asked for a simple clarification, but none was provided. And during all these past four years, all they're feeding us is that the policy is being reviewed.
All of these led to the automotive sector being what it is today in Nigeria. But, there are still hopes from the Government to bring back the full potential of this sector.
