Nigeria Aims to Become a Major Player in Vehicle Manufacturing Industry
Nigeria is set to make a significant mark in the vehicle manufacturing industry, with plans underway to position the country as a key player in the sector. The Minister of Industry, Trade, and Investment, Doris Uzoka-Anite, made this announcement during the launch of the Nigeria Automotive Industry Development Plan.
The development plan aims to transform Nigeria into a fully-fledged vehicle manufacturer within the next decade. Uzoka-Anite highlighted that Nigeria possesses the necessary resources, skills, and market to produce a wide range of vehicles, including motorcycles, tricycles, sedans, and heavy-duty trucks. The goal is to reduce the cost of purchasing vehicles for the average Nigerian.
To support this initiative, the National Automotive Design and Development Council proposed a five-year tax holiday for vehicle assemblers in Nigeria. This fiscal incentive is designed to promote backward integration and component production within the industry.
Key stakeholders from various government ministries and agencies, including Finance, Transport, Environment, Industry, Trade, and Investment, as well as the Nigeria Customs Service, the Manufacturers Association of Nigeria, and the Standards Organisation of Nigeria, are involved in the implementation of the Automotive Industry Development Plan.
Despite the potential for growth in the sector, Nigeria’s vehicle assembling industry faced challenges in recent years, with production costs rising and demand for locally assembled automobiles weakening. The sector experienced a decline in capacity utilization, leading to job cuts among local assemblers.
The Federal Government’s Automotive Policy of 2014 aimed to support local automobile companies, boost local content, and establish a vehicle financing scheme for citizens. However, the industry continues to struggle due to the government’s preference for imported vehicles and inadequate regulations.
Currently, Nigeria produces less than 10% of the vehicles used in the country, highlighting the need for concerted efforts to revitalize the local automotive industry and achieve the goal of becoming a major player in vehicle manufacturing on the continent.
