FEC approves new car policy to cut N550bn annual car import

The Federal Executive Council (FEC) on Wednesday finally gave its nod for the new national automotive policy.
The government disturbed by the whopping annual N550 billion spent importing cars took the decision to grant approval to the new policy that has been on the drawing board for over nine months.
This is just as FEC also approved N41 billion for the development of infrastructure for the Federal
Capital Territory (FCT), including roads and residential infrastructure.
Government on Wednesday said it has identified and designated automotive clusters in Lagos/Ogun; Kaduna/Kano, and Anambra/Enugu states as the locations for the manufacturing of the new vehicles to enable them share resources and reduce cost of investments.
The new development which is also expected to revive, expand and develop the petrochemical and metal/steel sectors, will also see the return of tyre manufacturing industry to profitability to support the automotive sector.
Labaran Maku, information minister, while briefing State House correspondents in company of Olusegun Aganga, minister of trade and investments, and Bala Mohammed, FCT minister, after the weekly FEC meeting held at the Presidential Villa, Abuja chaired by President Goodluck Jonathan, disclosed that the success of the policy will also mean a gradual phase out of imported fairly used (‘tokunboh’) cars.
Aganga had disclosed that the national automotive policy will further encourage local manufacture of vehicles, adding that car import takes the biggest share of the  country’s foreign reserves followed by machineries.
The minister, speaking on the advantages of the new policy, said the Industrial Training Fund (ITF) is working with car-maker, Cena of Brazil, to open automotive training centres in Nigeria while two Nigerian universities have agreed to commence degree programmes in auto-mechanical engineering, all in a bid to provide adequate local manpower for the industry.
Nigeria, with 38 million middle class, is expected to benefit greatly with the creation of over 700,000 jobs.
“Council also approved that government should direct that all vehicle purchased by government should be from the local assembly plants unless it is specialised nature and National Automotive Council (NAC) have certified that it is not produced in Nigeria”.
“The council approved that the approved recommendation should be backed by appropriate legislation to give comfort to investors that there will be no abrupt change in policy”.
He explained that the policy was drawn over the last nine months and had the input of the National Automotive Council (NAC) and foreign car manufacturing giants like Toyota and Nissan that are expected to soon start announcing their specific investments in the country.
He disclosed that pitfalls observed in similar policies in the past, which included non-implementation of policies, lack of infrastructure, and inappropriate tariff regime were considered and adequately addressed under the new policy framework.
He disclosed that of all the most populous countries in the world, only Nigeria and Bangladesh do not have a successful automotive policy.