The Federal Government is set to begin the manufacturing and supplying of tyres, batteries, brake pads and other automobile components as part of efforts to boost the Nigerian automotive industry.
It said the policy aims to boost the supply of local components to auto part markets by 40 per cent.
The Minister of Industry, Trade and Investment, Doris Aniete, disclosed this initiative at the ministerial sectoral briefing to mark President Bola Tinubu’s one year in office on Tuesday in Abuja.
She said the programme would be in collaboration with manufacturers, dealers regulatory bodies and other players in the automobile ecosystem.
The Nigerian automobile industry for a long time has been dependent on imports to meet local demands for vehicles and spare parts.
At a recent event, the Chairman, of West Africa Automative Show, Luqman Mamudu, said Nigeria accounts for about 78.8 per cent of automotive components imported to West Africa.
According to him, about $6.2bn is spent on importing automotive components and parts to the region yearly with Nigeria alone accounting for $4.2bn.
But speaking during the briefing, the minister underscored that the newly developed framework will prioritise collaboration among manufacturers, dealers, regulatory bodies, and other stakeholders in the automobile ecosystem.
This collaborative approach is believed to be essential for tackling challenges and unlocking investment potential.
The minister also emphasised the significance of local automotive components, highlighting the potential for significant foreign exchange savings through domestic production of parts.
She said, “Steps are also being taken to unlock the potential opportunities inherent in the nation’s automotive sector. In collaboration with the National Automotive Design and Development Council – the anchor institution for the National Automotive Industry Development Plan and regulatory body for the automotive industry in Nigeria, the strategy and goal of the Ministry is to return the Nigerian Automotive industry to supply 40 per cent of its components locally comprising of glasses, tyres, batteries, brake pads, foam and seats, exhaust, electric cables etc.
“Towards this end, we have developed frameworks that emphasize the need for collaboration among manufacturers, dealers, regulatory bodies, and other players in the automobile ecosystem; because we believe that by working together, they can address challenges, streamline processes, and drive innovation. The automotive industry is set to sign off-take agreements amongst themselves and this is the beginning of history in Nigeria.”
She added, “With the MOUs and agreements, suppliers will be rest assured that car assemblers and manufacturers will buy their products. Assemblers will be guaranteed of their supply chain, quality and standards and consumers will be able to buy affordable brand new cars. This is how import substitution is done. We don’t have to use our FX to buy things we can produce. We don’t have to import if we can make it.”
Similarly, Aniete stated that the government had attracted the sum of $3.5bn to develop a resurgence plan for optimised performance of the Nigerian Cotton, Textile and Apparel Industry in partnership with development partners and private sector players to unlock the sector.
“The ministry is developing a Resurgence Plan for Optimized Performance of the Nigerian Cotton, Textile and Apparel Industry in partnership with development partners and private sector players. We have attracted $3.5bn investment capital to unlock this sector.”
According to the minister, Nigeria’s textile and apparel industry covers the entire clothing value chain and has a strong potential for growth due to the availability of cotton and the country’s large market- size represented by over 200 million inhabitants.
She said that the industry is one of the top contributors to the manufacturing sector of the economy, with the sector’s huge potential for employment creation, for both skilled and unskilled labour attracting foreign direct investment, and reducing poverty.
On revenue, the trade minister disclosed that the Lagos International Trade Fair Complex recorded significantly increased revenue to the federal government in the first quarter of 2024 amounting to 430 million naira against the revenue of 2023 was just 17 million naira.
The minister also disclosed that the ministry will host the Lagos International Trade Fair which was last hosted 14 years ago in 2010.
“With this massive increase and with the increasing facelift the ministry will be hosting the Lagos International Trade Fair, we are now set to host a popular Lagos International trade fair. This trade fair was last hosted 14 years ago in 2010 and this trade fair will reestablish our country as a market hub of West Africa.” she said
According to her, the revival of this trade fair symbolizes the government’s unwavering commitment to reclaiming its position as a regional market powerhouse in West Africa.
Anite added that the resurgence of the Lagos International Trade Fair will not only reestablish Nigeria as a regional market hub but also amplify market linkages for manufacturers, suppliers, farmers, and traders nationwide.
She said the revitalisation is poised to catalyze economic activities across various sectors, from tourism to manufacturing, while creating much-needed job opportunities and fortifying food security.
Concurrently, she said transformative reforms at the Nigerian Commodity Exchange aim to unlock equitable opportunities for farmers and miners in national and international markets as fruitful bilateral engagements with countries such as Qatar, the UK, India, and the UAE have further bolstered Nigeria’s market access and trade prospects.
To expedite export processes and mitigate rejections, Anite said the government is set to establish the one-stop export processing centres across geo-political zones to streamline operations with stringent regulations mandating exports against inward letters of credit aim to safeguard Nigeria’s natural resources while bolstering its currency and economy.