The Federal Government (FG) has stated that the implementation of the National Automotive Industry Development Plan would revitalize the local auto industry to enable manufacturers produce less expensive car models with the price range between N1.2million and N1.5million. It also said it would work jointly with auto manufacturers, franchise holders, reputable motor dealers and selected banks to put in place an all-inclusive domestic dealership network through which a user-friendly vehicle purchase scheme could be funded by the National Automotive Council.
In this regard, FG has begun to implement the 70% tariff on imported new and used vehicles to boost the local production of automobiles. On one hand, it is believed that the automotive policy would encourage local production and lower vehicle prices, while on the other hand, it seems unrealistic and unattainable because without necessary infrastructures such as uninterrupted electric power supply, good road networks and indigenous production of raw materials like steel and other raw materials needed to produce car parts, it will be highly impossible for the National Automobile Industry Plan to deliver brand new cars at its proposed range of between N1.2 and N1.5 million naira. This means Nigerians will be denied the choice of buying cheap second hand vehicles as well as the opportunity to own new locally-produced vehicles.
In a two week-long online conversation started by Chinedu Chiefsan, an Economics undergraduate of Imo State University in 9,332-member Spaces for Change.S4C’s Discussion Forum, generating nearly a thousand comments, young Nigerian professionals at home and abroad intensely debated and interrogated the efficacy of this policy, highlighting its high and downsides. Here are excerpts from the conversation:
Chinedu Chiefsan: This policy is killing off what’s left of the middle class. Despite our huge market size, I have come to a rather unfortunate conclusion that the Nigerian economy is not yet ripe for manufacturing till we fix our power infrastructure. Car manufacturing on the other hand is a heavy-duty, highly automated industry such that a single plant can in fact consume more power than the entire energy consumption of Owerri Municipal. This policy, no matter how well intentioned, will only encourage corruption, breed inefficiency and of course will lead to a reduction in the welfare of Nigerians.
Saya-Braide Ebi . The policy is aimed at making Nigeria the car manufacturing centre in Africa. How do we encourage emergence and growth of industries if we flood the market with imported goods? If we are fixing our economy, we need to fight from all fronts. Job creation will not come with “waiting to fix power first”. If we have good logistics and transportation infrastructure, we wouldn’t need too many cars on the road. This policy is good for the economy.
Okey Igbokwe What was the power generating capacity of China in the 70’s and 1980s? China’s generating capacity as of 70’s and 80’s was nearly 10,000 megawatts. Yet, the country locally manufactured goods and built their economy. Despite unsteady power supply, China was able to boost its industrial performance, without fear of stifling the middle-class. Gradually, China backed its industrialization with an aggressive pursuit of power infrastructure development and capacity generation. Today, China is the world’s darling in productivity and manufacturing. The Jonathan administration’s efforts in power infrastructure development and privatizations while encouraging local production and manufacturing despite the challenges of power is akin to what China went through some decades back and is on top of their game today. We’ll get there too.
Bologi Jimada Perhaps, you can add our national experience with Peugeot Automobile Nigeria (PAN), Volks Wagen (VW), Steyr and Anamco. China did not tax imports out of existence, rather, they copied out of them and created a separate market for their people who could afford the local cars. I recall that BMW sued a local company for copying the X5 design and lost. Today, the local industry is in all kind of partnership with top car manufacturers who have had to move their plants to China. If I understand well, these are policies guaranteed to make some individuals (cronies) mightily rich on the back of the citizens. We have heard all these before with the case of cement, for example, and we are still paying for it. In the name of liberalization and privatization, we have created all sorts of cartels including the new entrants in the power sector. And what have the citizens got in return besides the unrelenting drums of the foot soldiers insisting we are making gains? Yet things are not getting any palpably better, more than ten years since we started sailing these waters of economic cure. Like the popular wisecrack goes ‘it’s power, stupid’
Pamela Braide From Obasanjo down to Goodluck Ebele Jonathan – 3 presidents! We have taxed wheat and wheat flour to high heavens. All that has happened is bread and noodles and puff puff costs more with all the elaborate policy around it.
Saya-Braide Ebi China’s industrialization was fuelled by western industries’ preference for cheap labour and supply chain. China didn’t just start faking, they were trained by the west and started strategic policies to build theirs. Besides, most of the names mentioned here died because of the influx of imported brands, cars etc.
Manpan Wungak These argument of “don’t destroy the middle class”; until power improves”; “we are not ripe” are some of the very reasons that have kept us where we are now perpetually waiting for the right time. When will we ever be ready for change? Liberalize the oil industry and completely hands off subsidy….we are not ripe. State police…we are not ripe. Independent candidacy in elections. ..we are not ripe. Electronic voting…we are not ready. When will we ever be ready for anything in this country? Change can never happen by consensus. It must be forced upon a people. No one loves to move away from his comfort zone.
We import millions of cars into Nigeria daily. What that means in simple economics is foreign exchange and lost jobs. Do we need those jobs here at home? Of course! What are the limitations of this policy? How can it be better implemented? These are meaningful debates. But we must move away from this immovable attitude of “we are not ready”. Left alone, we will never be!
Bologi Jimada Policies are designed to help citizens, not punish them. We were told, cajoled and even forced into privatization, how much different has the private sector in Nigeria done its business even after all sorts of incentives from government? We are all too easily sold on this notion that it is big business that generates employment, but I think we should check again. Like Pamela alluded to, the policy may be well-intentioned, but are we going about it the right way? What is wrong with government charging the local manufacturers zero duty and perhaps encourage them to come together in clusters and building them power stations? What is wrong with government funding research and development (R&D) and benefiting local industries with such research? All these will significantly drop cost of production, improve quality and enhance capacity. The products will thereafter compete favorably with the imports and the citizens can make their choices knowing full well they are not being fleeced. Indeed no one will tell the foreign manufacturers to relocate here.
Mayowa Akinsola The other thing that could help the new automotive policy is unfortunately lacking in Nigeria. This is efficient mass transit system. And because it is this way, everybody needs a personal car to transit from point ‘A’ to ‘B.’ The Aganga idea of a Nigerian car cannot meet this vital need of Nigerians.
Thus everything taken together, Minister Aganga is not offering any solution either in the short or long run with the prohibitive 70 per cent tariff on auto imports. The starting point is to create an environment to bring back the service companies, which will ultimately lead to the return of the assembly plants. His prescription is too automatic for a good cure and also sounds too much like building something on nothing. If the policy pressure become too much, Nigerians will flood neighbouring countries to guarantee their tokunbos and even brand new cars. And these countries, if Aganga cares to know, are all too ready to lower their tarrifs to undercut Nigeria. In the end, it will be penny wise, pound foolish.
This kind of disconnection is somehow becoming the trademark of the imported experts in the federal cabinet. They are the Bretton Woods professionals who love to stand out from the crowd even when it does not pay to do so. They concoct noisy theories that do not blend well with the socio-political milieu and call it best practices as if what is best is practised in isolation of other variables.
Favour B. Afolabi I asked a very simple question –
1. ARE NEW CARS to be sold for a minimum of N2m designed to be bought by the masses?
2. Does every single human being in the US or UK or EU own a car despite the advancement of those nations and higher income capability of the people there?
3. Are you suggesting that ‘until NGR can provide a system where 170m of us can use public transport’ the FGN should abandon the policy of local manufacturing?
4. Are you telling me that every single person – the one that earns N1m; N10m; N100m per annum all fall within the same category and must all have the same transportation plan designed for them meaning ‘none of them is allowed to decide to buy a new car or use public transport?’
Emeka Nwokeocha Let us start producing our own fuel first before building and exporting aircrafts. Self-deceit is tantamount to self-destruction.
Chyke Nwokedi I like the way Mr. Bismark Rewane summarised it -‘The benefits are long term while the impact is immediate’. In a nutshell, it is the argument that some of us have been advancing – that common sense approach should guide policy formulation. Given our harsh operating environment, how do we protect a sector that is in infant stage, provide alternatives for consumers without creating inflationary pressure and guarantee satisfactory or near satisfactory outcomes for all stakeholders.
Samuel Diminas It is utopian to discuss serious reforms or rapid development without short term pains. We know quite well that a lot of effort to boost the recently-recessed western economies involved a lot of pain, tax increases for certain brackets, cuts in civil service, welfare and benefits and a lot more. In France, the tax rate for the higher bracket was raised to as much as 70%. Do we love this? No. Does it have immediate negative impact, YES. No country makes progress by proposing to remain in the same position. Doing nothing is not a policy option for change.
Temitope Adeyinka I do not agree that Rewane’s statement is utopian. There are instances where immediate negative impacts that can totally destroy long-term benefits. That will be a case of costs totally outweighing benefits. In a few years we shall see how this works out.
Bode Ayodele ‘…Despite our huge market size, I have come to a rather unfortunate conclusion that the Nigerian economy is not yet ripe for manufacturing till we fix our power infrastructure.’ I personally agree with this post. The basics must be adequately taken care of first before you think of venturing into advanced areas of national development like the setting up a car manufacturing industry. Expecting such to thrive when the Power infrastructure can hardly support existing industries to me, is akin to when Pharaoh in the bible asked the Israelites to produce the same amount of bricks without hay and stubble! Nigeria must get her priorities right. A sound – not make-shift, as is the case now – Power infrastructure base is necessary for a well-run, car manufacturing industry to take off. Otherwise, Nigerians will be forced to buy sub-standard, non-competitive/exportable cars!
Chinedu Chiefsan It is not true that people are going to China to manufacture goods due to the existence of cheap labour. They are going there to produce because apart from having cheap labour, China has built up infrastructures to support manufacturing and energy in abundance. As a matter of fact, wages have been rising in China in the past 3 years and companies continue to relocate their manufacturing plants there because this is expected as the economy nears full employment.
If you want to support manufacturing in Nigeria, it is not by taxing out imports or imposing 200% duty on imported goods.
1. Create the enabling environment by way of infrastructures. The roads are getting better but energy remains nonexistent.
2. Grant subsidies to local manufacturers to make their outputs cheaper relative to imported ones and then allow Nigerians to make their choices.
Pamela Braide …. all this “suddenly” advantage is rubbish. It isn’t real. It needs to be backed by multi-layered change that generates jobs and builds expertise across board and not extremely high level business monopolies. That’s why 8 years after steadily tariffing the hell out of wheat, we are not eating cassava bread in any appreciable quantity. The new (retroactive) tariff on books and printed material for heaven’s sake is meant to grow the local printing industry. Meanwhile they forgot they put a tariff on paper and ink to encourage local paper and ink industries in the past! So basically you are being encouraged to print locally on expensive paper and ink because there’s a tariff … quick fixes for momentary ideas. Meanwhile, I don’t know one Nigerian printer that isn’t so busy they have to be policed not to default on deadlines… so what’s the tariff for?
When Bala Mohammed wanted his friends to get automatic cab monopoly in Abuja they woke up from sleep and banned all cabs unless they worked for two soon-to-be launched companies. Luckily the cab association hired Festus Keyamo and eventually the Federal Capital Territory FCT conceded to them creating a third company from their union so they wouldn’t turn into overnight house boys. Where are those two companies now? This isn’t the same thing of course…. I am digressing…. but sometimes the vision looks grand but really isn’t.
What we need to attract imports are:
1. An educated workforce of different levels including technical skills.
2. Power.
3. An attractive tax regime or incentives… Infrastructure such as ports, roads etc.
4. Stable policies… no flip flops and an ability to remember the last policy made that clashes with the new policy ….. we can’t keep up.
Chinedu ChiefsanNigeria is a still a developing economy so the demands for cars at this stage is very much inelastic till alternative and equally good well planned public transport system emerges which would reduce the need for people to buy personal cars. So this policy is going to directly affect the masses as they are the ones who will bear the final brunt of the newly imposed duty
2. Our borders are very porous and there is little anyone can do about it. Those charged with the responsibility of safeguarding them are the ones making a kill from them. So just like rice, people will continue to import cars into the country through the back door and then sell them at the new market rate. It’s a Nigerian thing.
3. Based on the no 2 premise above, the revenues which should ordinarily accrue to the government will begin to dwindle and we are talking about hundreds of billions of Nigeria.
Finally, we currently lack the capacity to produce/assemble enough cars to meet local demand. Official stats say we import 800,000 units while local production is about 45,000 so you are creating a huge deficit that will ensure the scenario painted above eventually plays out. This is a bad policy, no matter how well intentioned it might look on paper.
Segun Akande What we REALLY need is smart persons like Pamela, Chinedu, Victoria and co, in government (driving and administering the formulation and implementation of intelligent and well thought-out policies) and the actual steering of the economy. People who can see the big picture and how each pixel (inter)connects and relates. Not just any person who happens to be popular and belongs to a particular political party. Alas, this expectation will remain largely unrealized until we sit up and begin to chart our own course.
Pamela Braide Our blissful ignorance is cute. Does anyone here realise apparel and shoes bags belts etc are BANNED items in Nigeria? Have been. Still are. Including secondhand aka okrika…. have you seen any shortage of such? Some of us here may even sell or have persons that sell clothes and fashion items. What does the ban do? Enrich people in a bribe/smuggling spiral. For every one crate of okrika being smuggled through 10 guns will join under…. everyone tell me what you are wearing… contraband! Tackle the ROOT and quit faffing about.
Goods: The Importation of Which is Absolutely Prohibited –
1. Air Pistols
2. Airmail Photographic Printing Paper.
3.All counterfeit/pirated materials or articles including Base or Counterfeit Coin of any Country.
4. Beads composed of inflammable celluloid or other similar substances.
5.Blank invoices.
6.Coupons for Foreign Football pools or other betting arrangements.
7.Cowries.
8.Exhausted tea or tea mixed with other substances. For the purposes of this item, “exhausted tea” means any tea which has been deprived of its proper quality, strength, or virtue by steeping, infusion, decoction or other means.
9.Implements appertaining to the reloading of cartridges.
10.Indecent or obscene prints, painting, books, cards, engraving or any indecent or obscene articles.
11.Manilas.
12.Matches made with white phosphorous.
13.Materials of any description with a design which, considering the purpose for which any such material is intended to be used, is likely in – the opinion of the president to create a breach of the peace or to offend the religious views of any class of persons in Nigeria.
14.Meat, Vegetables or other provisions declared by a health officer to be unfit for human consumption.
15.Piece goods and all other textiles including wearing apparel, hardware of all kinds’ crockery and china or earthenware goods bearing inscriptions (whether in Roman or Arabic characters) from the Koran or from the traditions and commentaries on the Koran.
16.Pistols disguised in any form.
17.Second-hand clothing.
18.Silver or metal alloy coins not being legal tender in Nigeria.
19.Nuclear Industrial waste and other Toxic waste
20. Spirits: – Other than – •Alcoholic bitters, liqueurs, cordials and mixtures admitted as such in his discretion by the Comptroller-General and which are not deemed to be injurious spirits within the meaning of any enactment or law relating to liquor or liquor licensing.
• Brandy, i.e. a Spirit Distilled in Grape-growing countries from fermented grape juice and from no other materials and Stored in wood for a period of three years;
•Drugs and medicinal spirits admitted as such in his discretion by the Comptroller-General.
•Gin, i.e. Spirit- Produced by distillation from a mixed mash of cereal grains only saccharified by the diastase of malt and the Flavoured by redistillation with juniper berries and other vegetable ingredients and of a brand which has been notified as an approved brand by notice in the Gazette and in containers labeled with the name and address of the owner of the brand; or
Produced by distillation at least three times in a pot-still from mixed mash or barley, rye and maize saccharified by diastase of malt – and then rectified by re-distillation in a potstill after the addition of juniper berries and other vegetable materials.
•Methylated or denatured spirit, i.e. – Mineralized Methylated spirit mixed as follows: – To every ninety parts by volume of spirits nine and one-half parts by volume of wood naphtha and one-half of one part by volume of crude pyridine and to every 455 litres of the mixture 1.7 litres of mineral naphtha or petroleum oil and not less than 0.7 grammes by weight of powdered aniline dye (Methyl violet) and so in proportion for any quantity less than 455 litres; and
Industrial Methylated spirit imported under license from the Comptroller-General and mixed as follows: – To every ninety-five parts by volume of spirits five parts by volume of wood naphtha and also one-half of one part by volume of the mixture; and
Spirits denatured for a particular purpose in such manner as the Comptroller-General in any special circumstance may permit;
•Perfumed Spirits
•Rum i.e. a Spirit – Distilled direct from sugar-cane products in sugar-cane growing countries; and
Stored in wood for a period of three years.
•Spirits imported for medical or scientific purposes, subject to such conditions as the Comptroller-General may prescribe;
•Spirits totally unfit for use as portable spirits admitted to entry as such in the discretion by the Comptroller-General; and
•Whisky, i.e. a Spirit- Obtained by distillation from a mash or cereal grains saccharified by diastase of malt; and
Stored in wood for a period of three years.
Containing more than forty-eight and one-half per centum of pure alcohol by volume except denatured, medicated and perfumed spirits, and such other spirits which the Comptroller-General, in his discretion, may allow to be imported subject to such conditions as he may see fit to Impose.
Weapons of any description which in the opinion of the Comptroller-General are designed for the discharge of any noxious liquid, gas or other similar substance and any ammunition containing or in the opinion of the Comptroller- General or adapted to contain any noxious liquid, gas or other similar substances
source – https://www.customs.gov.ng/ProhibitionList/import_2.php
Saya-Braide Ebi It’s quite unfortunate that anytime government makes a policy, all we see is how it will affect one aspect and ignore the rest. The borders are manned by Nigerians. It is Nigerians that smuggle stuff in contraband and it is Nigerians that buy those smuggled good. If this policy succeeds, it is Nigerians that will make it successful. If it fails, it is also Nigerians. That government should wait until everything works perfect before making such policies is very wrong. Development is driven by deliberate policies. Europe is making sacrifices. China made sacrifices, Nigeria can’t wait. I don’t have time, may be tomorrow. But, there’s not enough reason why a country should not encourage manufacturing, especially cars that drive incidental businesses. The reason why such policies are made is exactly because of the masses. This policy will promote skills, and education. How many mechanical engineers will find jobs electrical engineers etc. The reasons you submitted are just challenges and sacrifices that naturally comes with policies like this. No country can move forward without making sacrifices.
Saya-Braide Ebi Are you saying that cheap labour and supply Chain infrastructure didn’t contribute to reason why the west cited industries in China? Cheap labour, supply chain infrastructure and labour laws forced the west to cite manufacturing branches in China. If Nigeria imports about 800’000 cars, how many are brand new and how many are used? What is the percentage short fall of the brand new cars made here as against the imported ones?
Victoria Ibezim-Ohaeri Majority of imported cars are used….I mean as much as 80%. Affordability is the push factor.
Bologi Jimada PAN was always going to struggle because it got used to selling its cars at outrageous costs to government. A cost the average individual on the street could not afford. That’s why after the government patronage for Peugeot cars dried up, the fortunes of the company declined with it. It is also debatable if the owners of PAN were truly committed to full assembly, particularly as the parent company was struggling with sales and wanted to launch new models. The local content quota also proved a tough nut to crack. Most of the local parts failed willy nilly because of quality and they were bedeviled with scheduling problems as a result. Steyr tractors in Bauchi faced same problem of government patronage. ANAMCO was doing a bit well initially until it was privatized in the typical Nigerian way. I can’t recall the detail of its problems, but Mercedes requested to remove its name and endorsement of the franchise. I believe we can ask Prof Utomi what happened to VW.
The new policy is not too dissimilar with past ones, especially the one relating to government patronage. We have every reason to be proud of local manufacturers like Innoson, but the sustainability of that business is dependent on the quality and price of the product. If government patronage dries up or the product cannot prove its mettle in the market, it will fall off the market and like Chinedu said, the black market business will boom the more. If we are to pay true homage to the free market mantra, a business must be able to, not only prove it’s self in the market, but should be able to survive withdrawal of government patronage or policy reversals.
I’ve been to quite a few car manufacturing plants, and R&D is hugely capital intensive same as power consumption. It’s doubtful if locally owned franchises can compete easily in the face of the tough and stringent regulations facing automobile manufacturing, except if they will not export the vehicles. And then there are liability issues which most car manufacturers face. Are we sure our work ethics, general attitude and predisposition are up to the task? The average workman I’ve come in contact with is out to milk dry you and your business, period. This is why most of our low level manpower are treated almost like slaves and policed like criminals by foreigners.
There is a huge demand for vehicles in Nigeria in lieu of a well-organized, safe and comfortable public transportation, but the bulk of these demand is still in the ‘tokunbo’ price range. Cue TATA! People want budget cars which will be efficient, reliable and cheap. So the business module for local manufacturers matters a lot in capturing a niche market and sustaining production. Finally, most car manufacturers are throwing out more and more of the human element and replacing them with robots. Robots don’t make silly mistakes humans make which often leads to loss of life and liabilities and bad press. So we should over all, temper our huge expectations concerning the anticipated employment potentials of car manufacturing. After all, they are in business to make money.
Chyke Nwokedi It is a bad policy. Protectionism has never really worked (especially in Nigeria) and I do not see this working. Without extending the tenable arguments that have been advanced by Chinedu, Pamela and Bologi, the mix of variables are evident. Price, Demand, supply and Disposable income. Sometimes, one wonders why common sense approach and empathy cannot guide the formulation of our policies.
El Shayib Abdullah Mohammed The singular problem with Nigeria’s approach to economic development is that it’s mostly a cosmetic approach that does not address the fundamental factors that aids economic growth. When you look at countries on the fast track to economic development like China, India and to an extent, even the United State, they have one thing in common. At a particular point in history they each embraced an isolationist policy. The single goal of this policy was to enable these countries address the fundamental issues of development which would put them on a proper setting to compete globally when they finally open up.
How can we ever hope to start manufacturing cars when we can’t even get something as basic as power right?
John Ogunlela The answer is in creating a monopoly, isnt it? Zero competition will protect Nigerian consumers. I think they’d reverse it before December.
Samuel Diminas Car manufacturing started in early 1900 there was no power then. Our quest should be to search for solutions to our problems. It is quite premature to reach conclusions on this policy yet, I have a car berthing in Nigeria on the 7th and every agent I have spoken with has informed me the policy is not yet being implemented yet and is unlikely to be.
However if it is, let us remember that the policy was put together in a collaborative effort between the ministry of commerce and industry and local car assemblies, manufacturers, and intending manufacturers; Stallion, Innoson, Nissan etc.They are better at driving the policy for their market.
Nigerians should generally be demanding mass transit from their local, state and the Federal Government (FG).
Fidelis Aṅụmole-Ọparakụ Even if one does not like this government, that doesn’t mean you have to disagree with all of its policy. I was even thinking that they will come up with argument that the FG should make the interest rate to be low so that people can have access to auto loan. In all the countries in the world, 99.99% of people don’t buy car in cash. The take it on loan with little interest rate. This is what we should be fighting for and not debating on what is right!
Chinedu Chiefsan You are right, Samuel Diminas. Car manufacturing started in the 1900s as an offshoot of the industrial revolution which started two-three centuries earlier with the invention of the steam engine. Of course these couldn’t have been possible without electricity to power those engines. Thomas Edison and co comes to mind. So saying there was no power as at the time when car manufacturing started in 1900s isn’t exactly true. As a matter of fact the idea of electric vehicles, that we celebrate today, actually dates back to the emotive days of car manufacturing itself.
You and I know that it costs more to make a pair of jeans in Nigeria than it costs to make and import same from China or Vietnam because Nigeria is not competitive when it comes to manufacturing. Shouldn’t the natural thing have been to improve our competitiveness? I cited an example above where China as early as 1980s was pursuing a 300,000 megawatts power policy, even before they started thinking of making cars. I don’t know why we can’t go these routes.
Saya-Braide Ebi That’s exactly my point, if only 20% are brand new, 45000 initial production rate of brand new cars is commendable. Because you hate a man doesn’t make you analyze a policy in a wishy washy manner. Detroit is broke today because car manufacturing industry died, that killed insurance firms, leather companies, banks were affected as well. What are you guys afraid of? Progress? Affordable, can’t you see that if CKD will revive car assembly plants in Innewi, over time cheap and affordable cars will be available? How much is a brand new made in Nigeria car? An average of 3.5m. How much is an imported brand new car now? Wow. I think this argument is not about this auto policy, its something else.
Saya-Braide Ebi Did South Africa open their borders for importation of anything including toothpicks? How friendly was business during the military era. DO WESTERN BUSINESSES ENCOURAGE MILITARY REGIMES? Have you forgotten so soon how PAN was killed by unregulated influx of imported car brands into Nigeria and the Structural Adjustment Program (SAP)? Are businesses not coming to Nigeria now? South Africa has comparative advantage over us. They have a very robust mining industry, raw materials for capital goods are readily available, we don’t.
Kemi Adeloye I’ve always said that this government lacks an articulate blueprint on anything let alone economic management. When a country produces products that are unaffordable to the citizenry, water will find its level. So many things have been banned in Nigeria but they are sufficiently around to make nonsense of the ban.
How will the local plants succeed without the participation of the middle class? The government erroneously believes that its own patronage of the local assembly plants will be sufficient to sustain them. ..How myopic a thought! When you strangulate the majority that constitutes the market; when you engage in financial profligacies that deprives the system of the needed upliftment such than gainful employment is lost with it; such government cannot be described in glowing terms.
The government has shot itself in the leg. It is totally bereft of sound ideas in every department of governance and just wasting national resources.
Saya-Braide Ebi Do we have a middle class in Nigeria? Industrialization produces middle class. Obasanjo banned so many products; today we have many people into manufacturing. How many fruit juice manufacturing companies do we have now? At a time in Nigeria, water was imported in bottles; today we have so many bottle water companies. Instead of insulting the government or speaking in a condescending manner, if you know better just tell us how we can revive manufacturing given the challenges we have already. Hate filled thinking is not a sign of sophistication.
Samuel Diminas We need to get to work and stop dwelling on fallacious negativities. Dangote cement is blazing the trail and turning over billions, it is a very profitable manufacturing company, so also are thousands of companies. Innoson motors have been manufacturing cars for some time now and are very successful. Google his interviews, these are the people whose words on this issue should be reviewed for information.
When you consider the size and population of China in the 80’s you would appreciate that the power situation in China and India was worse than Nigeria’s when they kick started the rejuvenation of their industrial revolution. (China and India had started car manufacturing as early as the 30’s, their own industry followed an outright ban on importation for several decades)
Fada Peter Osuji We need to progress in Nigeria knowing fully well that progress in historical epoches were not born out of convenience. Progress inflicts momentary pains but eliminates long term pains.
Pamela Braide Yes Dangote runs a near monopoly and he and his cohorts at that level sell us some of the most expensive cement on earth with the biggest profit margins of any cement industry in the world. Yet we make noise about meeting general housing needs….. Thats really inspiring! When we are ready to progress we will progress. We create these pseudo success stories….. There’s no justification for cement costing 3 times as much as you can get it for in Asia other than government policy. NONE!
Samuel Diminas Success is not defined by your parameters for everyone.
Dangote cement is one of the most successful stories of manufacturing in Africa.
Many cement companies existed before Dangote. Many still do. Dangote is not a monopoly, many cement companies also existed before Dangote. Lafarge which is present in Nigeria is one of the biggest cement manufacturers globally. We also have Ashaka Cement, Atlas, Eagle cement, Ibeto cement and many more. The reason why cement is seemingly expensive is a function of demand and supply. Nigerians; poor and rich build everything with 100% cement, something that is not done anywhere else.
Before we derail from the point which brought Dangote, do you agree that the success of Dangote group puts a lie to the talk of nonviability for manufacturing because of power? Don’t forget we also have a very successful car manufacturing company, Innoson motors, how many of those complaining of cost of German cars have bothered to go and look at Innosson with a view to patronizing them? http://www.innosongroup.com/innosonmotors/suv.php
Victoria Ibezim-Ohaeri I am happy to learn about the story from the Indian newspaper regarding Nissan operations in Nigeria. Its gladdening that the new automotive policy is attracting investors… But compare that fine development (the entrance of Nissan) to Bologi Jimada and Kemi Adeloye’s sad reminder about disappearance of hitherto flourishing companies like Dunlop, Michelin and the textile industries.
I think the issue Chinedu Chiefsan has raised is whether those impeding factors and structural obstacles that led to the downfall of past business enterprises have been addressed effectively. What he seems to be saying is that: – The new automobile policy CANNOT succeed absent the reform of policy, institutional and infrastructure frameworks that support local manufacturing. The new regime must significantly shift away from past trends, policies and official actions that muzzled factors of production. Anything other than that is political grandstanding.
Saya-Braide Ebi You guys assume power sufficiency will come at NO COST to the manufacturing sector. You guys want to continue in this narrative without factoring in the obvious efforts and progress being made.At a point in Nigeria we were generating less than 3000MW, why do you think we will continue to have this ” 4,500 MW, half of which is trapped and undistributed, in an economy of $510 billion? The picture you are painting is framed, unchanging, fixed, while what is happening is mobile, changing, improving.
Victoria Ibezim-Ohaeri Lack of stable power supply will NOT stop manufacturing, but it is a restraining factor. It is a factor that impedes incremental progress. It is a factor that continually makes production costs to go up. As long as the cost of production is high, the value of goods and services will remain high.
That explains why the influx of foreign goods and services will continue to threaten locally manufactured goods. Those foreign goods/products are manufactured in countries that have lesser power or electricity challenges and as such, production cost is quite low. That is the point you seem to be missing.
The emphasis is: reduce the cost of production by stabilizing power supply. Simples!
Bode Ayodele Beyond the points that Victoria has raised to which I concur, my main concern with creating a monopoly out of a local car manufacturer – or an oligopoly of manufacturers- is the issue of standards.
It is good to see local car manufacturers like IVM emerge and compete successfully with imported cars. Nigerians manufacturers are not disciplined enough however, to give the best when there is no compelling factor do so. The car making industry is too important to leave it in the hands of a few.
If the FG is serious there are other ways they can invest in and enhance the viability of the industry by providing other incentives – definitely, stifling the importation of cars for now – should not be one of them!
Chetaala Ilo I been hearing about the policy over the past two weeks but chose to ignore it simply because some friends are involved… but my patriotic duty to this intellectual forum is to state that it is a faulty policy for now, being done to benefit some well-connected businessmen, including some enterprising auto magnates. It is also an avenue to make easy money on top of laundered money.
