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House Committee Lauds FG’s New Automotive Policy

180613F.Olusegun-Aganga.jpg - 180613F.Olusegun-Aganga.jpg

Olusegun Aganga,                                             Hon. Mohammed Ogoshi Onawo 

(Trade and Industry Minister)                 ( Chairman House Committee on Industry)

 

The House of Representatives Committee on Industry has commended the federal government for the introduction of the new automotive policy, saying the policy will help transform the automotive sector.

The Federal Executive Council (FEC) had recently approved new measures aimed at transforming the automotive sector and ultimately put Nigeria among the league of auto-producing countries.

Speaking during an oversight visit to the Ministry of Industry, Trade and Investment in Abuja, the Chairman, House Committee on Industry, Hon. Mohammed Ogoshi Onawo, said the implementation of the new measures would attract new investments into the sector, protect local automotive manufacturers and create employment.

Onawo, who was accompanied by 12 other members of the committee, said: “I was pleased to hear about the new measures by the Ministry of Industry Trade and Investment to transform the automotive sector.  Of particular interest to me is how to use tariff to protect local manufacturers. One of the major challenges facing those manufacturing cars in Nigeria is the tariff structure.

“If somebody who is importing a complete car is paying less than somebody who is manufacturing, then you are not encouraging the person who is manufacturing. With the new measures being put in place by the ministry. I am sure it will protect those investors who are willing to come to Nigeria and invest in assembling or manufacturing  vehicles here.”

 

He added that the House Committee on Industry was in support of the introduction tariff measures to protect indigenous automotive manufacturers in order to increase the capacity utilisation of the sector.

 

He said: “The House Committee on Industry is very insistent on the fact that anybody who is going to import complete car is going to pay a higher tariff than somebody who is going to manufacture here because that is the only way that you will be able to protect who is going to create employment here.

“The Ministry of Industry, Trade and Investment is one of the most important ministries in the country in terms of helping to diversifying our economy. And given the mandate of the ministry, what it is has achieved so far and what it has set out to achieve, we are calling on the necessary organs of the government to give a special attention to in terms of funding so that our economy can be better.”

Speaking during the meeting, Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, said the ministry would continue to partner stakeholders, including the National Assembly in the implementation of its Industrial Revolution Plan, adding that the new automobile policy would have a catalytic effect of fast-tracking industrialisation, creating jobs and generating wealth for the country.

He said: “The new measures to transform the automotive sector is part of our Industrial Revolution Plan, which is integrated , holistic and based on areas where we have comparative and competitive advantage as a country. In South Africa, for instance, the automobile industry plan has reduced the burden on the country’s trade balance and today the country is balance of payment-neutral.  Likewise, the potential for Nigeria’s automobile industry plan is to save as much as N550 billion (US$3.5 billion) through the reduction of imports. We also have the regional export potential into the West and Central African market, coupled with the availability of a large and trainable workforce.

“Recognising the strategic and catalytic effects of the automotive industry in industrialisation, job creation, and wealth formation, among others, emerging economies like Brazil, China, Malaysia, India, Iran, Indonesia, Thailand and South Africa took deliberate steps to develop their automotive industry between the 1960s and the 1980s. Nigeria started about the same time in the 1970s.These countries have, however, developed well-advanced automotive industries now, in contrast to Nigeria.

“The strategies they followed, which we earlier failed to do, include a comprehensive development plan, patronage of local products, appropriate fiscal measures and consistent application of policies over the long term. These issues have all been addressed in the new measures approved by FEC. The Nigerian Auto Development plan will promote investments in the assembly of inexpensive cars in the country, at prices which Nigerians can afford, and will gradually substitute the large and growing car imports coming into the country.”

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