LCCI offers window to economic growth, jobs creation, others
It noted that the policy initiated by former President Goodluck Jonathan’s administration in 2013, not only failed to achieve the desired result, but it has adversely impacted the cost of doing business.
It also impacted people’s welfare, government revenue and capacity to create jobs, adding, “The policy has also penalised compliant stakeholders in the sector with extant rules, taxes and tariffs applicable to the automobile industry.”
The LCCI blamed the over 400 per cent increase in the price of vehicles in the last five years on failure of the auto policy, which was an import substitution industrialisation strategy to reduce importation of vehicles and incentivise domestic vehicles assembly.
A communiqué signed by its Director General, Muda Yusuf, noted that import substitution strategy thrives in the context of high domestic value addition.
“It is within such a framework that the economy could benefit from the inherent values of import substitution, which includes backward integration, multiplier effects, conservation of foreign exchange, jobs creation and reduction of import bills.
“The review would be a relief to the private sector from the logistics perspective; more jobs will be restored in the automobile industry; smuggling will reduces and activities will snowball in the maritime sector.
“Car assembly plant will be better off with a five per cent duty on SKD; welfare effect on citizens will be positive; vehicle affordability by the middle class will improve; transportation sector will benefit and smuggling of vehicles will reduce drastically.
“The Nigerian Ports Authority (NPA) and ports terminal facilities will be more optimally utilised for better revenue performance; and customs revenue from vehicle imports will improve considerably,” the communiqué stated.
Yusuf disclosed that the five-year-old auto policy was not sustainable in its current form, as it was not in consonance with the Nigeria Industrial Revolution Plan (NIRP), which was the main industrial policy document of the present administration.
“The NIRP espouses the strategy of resource-based industrialisation. Five years into the implementation of the auto policy, not much progress has been made, even though over 50 Vehicle Assembly plants licenses have been issued. Total annual sales of new cars in 2017 and 2018 were estimated at less than 10,000 units,” he added.