Auto Policy Bill rejected: What next for Nigeria?

The auto industry in Nigeria has been in a state of flux following President Muhammadu Buhari's rejection of the Auto Policy Bill. Auto industry experts, including Bambo Adebowale, Chairman of the Auto & Allied Sector at the Lagos Chamber of Commerce and Industry, have raised concerns about the bill, citing its narrow focus on vehicle assembly and manufacturing without addressing the entire value chain of the auto industry. Adebowale highlighted the importance of a comprehensive policy that includes assemblers, dealers, technicians, and other stakeholders in the industry. The lack of provisions for phasing out used cars and inadequate financing options for acquiring vehicles have also been major points of contention. Adebowale emphasized that without addressing these fundamental issues, any policy implementation would be ineffective. The staggering increase in car prices due to duty hikes, inflation, and currency devaluation has further exacerbated the situation, leading to a surge in the demand for used cars in Nigeria. Adebowale stressed the necessity of finance availability for viable car sales, as the current market conditions make it challenging for consumers to afford new vehicles without financing options. Additionally, he pointed out that out of the 58 licensed assembly companies in Nigeria, most only produce up to 1,000 vehicles annually, raising questions about the sustainability of the local assembly industry. Adebowale commended companies like Renault and DFM Motors for their proactive approach in entering the Nigerian market without government incentives and stressed the importance of a robust supply chain and a thriving secondary car market for the industry's growth. He expressed optimism about Renault's re-entry into Nigeria and emphasized the need for a market where Nigerians can swap their old vehicles for newer models with financing options. The recent signing of the African Continental Free Trade Area agreement presents both opportunities and challenges for Nigeria's auto industry. While the agreement opens up a vast market with significant potential, Adebowale cautioned that Nigeria must address its competitiveness and production inefficiencies to avoid being outperformed by other countries. He highlighted Morocco's successful automotive industry and Renault's presence in the country as examples of strong competition that Nigeria must contend with. Adebowale urged policymakers to prioritize industry alignment to enhance Nigeria's competitiveness and avoid becoming a dumping ground for imported vehicles. The future of Nigeria's auto industry remains uncertain, with stakeholders calling for a comprehensive and strategic approach to address the industry's challenges and capitalize on emerging opportunities.