While the Nigerian automobile industry has registered negligible growth in the recent years, due to many factors including substantial neglect of the government, private enterprises have actively taken the sector and expanded its retail activities majorly through importation.
With a huge proportion of the entire sector leaning on imports by private enterprises, and little innovative growth of local automobile enterprises, most effort of the government in the sector has centered around importation policies.
The focal point of these policies has been to encourage local production while cutting in on importations through increasing import duties.
According to an article published on Nairametrics, “In November 2013, (the government) announced the introduction of a new automotive policy. The policy allows local assembly plants to import completely knocked-down vehicles at 0% duty, semi-knocked-down vehicles at 5% duty, while importers pay a 70% duty on new and previously owned vehicles.”
Regardless of the high duty percentage, the industry has still been unable to achieve the desired prospects of encouraging local assembly plants and reducing imports as more private enterprises are active in automobile imports.
Founder and CEO of Big-T Autos, an automobile retail company in Lagos, Nigeria, Mr Abel Edeh in a private interview has spoken on import policies of the government on automobile imports and the fundamental improvements it requires to help boost the sector.
He said “The current policies are created with the intention of growing the local economy and industry, but a huge lack in infrastructure makes it nearly impossible to achieve those goals even in the short term.”
He adds; “It’s important that the government factors the current condition of the entire economy and understands that some sectors are better handled by private enterprises. Although this can cause the issue of monopoly in the sector, and that’s where the government should come in. Rather than increasing import duties in a bid to aid local innovation which still seems very distant due to lack of proper infrastructures, the government should simply act as a referee by regulating players in the importation sector.
Also speaking on the issue, CEO of MFV Autos Limited, Mr. Osedebamen Odigie says “the specifications of an ideal policy is a quite an extensive topic, but generally a policy that takes care of quality assurance, grey imports and also protects the business parties involved in the market, allowing a fair environment for players in the sector to thrive on their diverse but unique abilities.”
Hopefully as the effects of the COVID-19 pandemic recedes and major sectors of the Nigerian economy begins to stabilize, authorized institutions will reflect the government’s stand on automobile import policies and create a more practical solution for the sector.
– The Nation