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NAC to stake N7.5billion on affordable vehicle credit acquisition scheme

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Affordable vehicles

Affordable vehicles

• Strategises on ease of doing business to attract OEMs

To improve access to new vehicles and promote the patronage of locally assembled vehicles, the Federal Government, through the National Automotive Design and Development Council (NADDC) has announced plans to unveil a credit purchase scheme for Nigerians to purchase such vehicles.

According to the Director, Policy and Planning, Luqman Mamudu, the council is contributing about N7.5 billion interest free rates into the scheme ‎with a counterpart funding from a company in South Africa to help Nigerians get access to affordable and new vehicles.

Besides, Mamudu said the council is planning to build capacities in local assembling to attract component manufacturers to set up their factories in Nigeria in order to boost production.

Mamudu, while addressing journalists in Lagos, said: “This is what we have been working on for the past two years. We looked at the available access to asset financing in the country and we found out that the high interest rate is frustrating the purchase of a new vehicle. This is the gap we want to fill. We are currently working with a company in South Africa, which has footprints in eight African countries where they have developed a commercial and financial model to get recoup their investment

At NADDC, we are also contributing our own N7.5 billion into the scheme while the South African company ‎will help source for finance from Development Finance Institution (DFI) at single digit interest rate. Our N7.5 billion into the scheme will be interest free.”

He added that when the funds are put together, it would guarantee an interest rate that will be easy for people to purchase vehicles at 8 to 10 per cent.

“By the time we put the funds together, it will guarantee an interest rate that is fairly okay. We are in discussion with the Central Bank of Nigeria (CBN) to originate the loans and float it so that it will be attractive for investors to partake in the scheme. Going forward, this will bring down the interest rate. This facility will be given to people that have the capacity to buy cars because we expect that they will have good credit to purchase a car.

“If you go to America, over 80 per cent ‎of car purchases are through loans. The credit purchase scheme will assist the operators to help the masses,” he added.

He said the council is planning to build capacities in local assembling to attract component manufacturers to set up their factories in Nigeria.

“We are building three laboratories costing about N3 billion in Lagos, Kaduna and Enugu. The one in Lagos is an emission-testing laboratory to test for the level of emission. We are almost 90 per cent complete. We also have a component part manufacturing testing laboratory in Enugu. We are doing all these to prepare for the next stage of component development because this is where job opportunities are enormous, but the entire process requires patience on the side of government and investors,” he stated

“We have to encourage these Original Equipment Manufacturers (OEMs) to come with their capacity. If we create the right environment for them, they will come with their capacity to produce here and if this happens, we can export from here to earn foreign exchange. We are calling on the ‎OEMs to use Nigeria as a hub for the whole West Africa, but we must be steady and focus so that we do not lose the opportunity,” he said.

He noted that Nigeria currently has the capacity to assemble 384,000 vehicles, but stressed that only 25,000 vehicles have been assembled so far.

He pointed out that the federal government will continue to pursue strategies to stop the influx of second hand vehicles into the country, noting that the scheme will go a long way to give alternatives to people who patronize ‎fairly used cars.


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3 Comments
  • Babalakin

    the nigerian elite and policy maker are living in illusion. all the credit facility will not make it possible to acquire a new car. it’s simple an average and most Nigerian cannot afford a new car. the monthly take home can not afford this

  • emmanuel kalu

    if you want to increase capacity and develop the local vehicle maker, demand has to begin with the government. why are elected officials, government workers and ministers all running around with imported vehicle. every government official should only use Nigeria made vehicle. this would increase the capacity for the local producers, generate income for them and allow them to focus on making a quality cheap car for the masses. most Nigerian’s even with interest rate a single digit can’t afford a new car.
    Nigeria government was take the hard way to do things and always starts from the top. if you want to improve any sector of the economy, the government is the biggest consumer and should use tax payer money to grow that industry.

  • olayiwola

    A good initiative that can work if the local content bill is implemented faithfully. The reality on ground is both the political and working elites are anti Nigerian pdts, but the current crisis can tame us all with key targeted policies