by Debo Adejuygbe

I’m sure many consumers have noticed that the Toyotas, Hondas, Hyundais, Kias etc that are sold brand new in Nigeria are inferior to those bought from the US, for example. If we have this problem on established brands and the government has done nothing to reverse the trend, what should we expect from ‘made in Nigeria’ cars that, to me, are going to be experimental?

I don’t intend to bore you with statistics or any of the available phalanxes of excuses churned out by our governments daily, in trying to convince us that they are working. All the rhetoric that have been finding their way abstractedly into the public domain needs to be scrutinized with the aim of understanding what the brains behind them had in mind at the moment of conception of such ‘lofty ideas’.

Enter the new National Automotive Industry Development Plan (NAIDP).

To paraphrase the minister of industry, trade and investment, Olusegun Aganga, Nigerians spent “a whopping $4.2 billion (about N550billion) on the importation of cars in 2010, and $3.4 billion on the item in 2012.” He also said the government would encourage banks to operate vehicle purchase schemes with easy terms; hike up tariff regimes to discourage car importation, the policy would include the establishment of automotive clusters in the three major regions and would also lead to a revival of the “petrochemical and metal/steel sectors and tyre manufacturing industries.”

 

Of course, these are beautiful plans and the expectations can be well managed with government’s dedication to the project and a proper phasing period that will usher in the new regime seamlessly. It seems the government has a completely different plan though. All I have are questions and hopefully someone would answer them. To me, the policy looks adjuratory. Take a look at the government’s body language – ah! We come to that again – and something is really amiss in these entire clamours for Nigerian cars.

The first shock the new policy birthed came 24 hours after its announcement. The FG raised the tariffs on imported cars by up-to 50% to be effective from January 2014. I know what you are thinking now: where are the new cars that, even without implementation of the policy, have been earmarked to be sold between N1.2m to N1.5m? You are not alone in that regards as that seem to be the major questions on the lips of majority of Nigerians. Good policy nevertheless, but is this how to go about it?

No! and before I go ahead to spew the jargons I intend to, I need to remind my readers that the present government is known for putting the cart before the horse on major policies. For those living in Nigeria (urban areas mostly) and are interested in their monthly PHCN bill, you would have noticed that between 2012 and 2013 alone, the tariffs on electricity was raised at least seven times. Reasons given? The government did it so as to guarantee a stable power regime and attract investors.

What has been the result of the increased tariff regime imposed on electricity consumers, on the guise of making it better? It has been the same old story. The same old excuses but we have been made to pay more for inefficiency. We were made to pay more without commensurate efforts to improve on the services being rendered and it is in the same vein that I’ll say the new automotive policy is set up to fail. They know this, but there are powerful forces that are going to benefit from it. Same reasons we are paying more than double the average world price for a bag of cement!

So, apart from the fact that the FG is fixing the price for cars yet to be manufactured, there are several other issues involved. Where are the infrastructures that are going to support the new policy the FG has painstakingly thought out? Yes, the projection of prices is good for any business venture that is worth its mettle, but when basic infrastructures like power and good roads – which are essential to the new policy – are still mirages to Nigerians, how well should we expect the policy to hold water?

While it is noble to think that our metal/steel industry will just develop a life of its own and sprout up because the government has commissioned a new policy, the realities on ground are far direr than what the government is even acknowledging. In the event of these drawbacks, have we – read Aganga – done a proper assessment that factor in costs of importation of parts, electricity (diesel) needed for the plants, the expertise needed to build the cars, the effect of market structures and the question of whether our economy is adjustive enough to take in certain risk factors?

Then there is the case of the fixed price – again – and the question of quality! What happens if the prices the government is championing falls short of what the manufacturers can sell at? Do they cut corners to meet up, does the government subsidize or do they damn the consequences all together to sell at whatever prices they deem fit

Also, the question of choice comes in. By making it harder for imported cars to be bought – because of the increase in price expected with the new tariff regime – the government is taking a choice away from consumers. If the new ‘made in Nigeria’ cars are very good, standardized and price competitive – in relation to the ones imported – do we really need to force people to buy? Even with the policy at the teething stage, the government had already made it more expensive to buy Tokunbo cars. What is the end game here? Common!

I’m sure many consumers have noticed that the Toyotas, Hondas, Hyundais, Kias etc that are sold brand new in Nigeria are inferior to those bought from the US, for example. If we have this problem on established brands and the government has done nothing to reverse the trend, what should we expect from ‘made in Nigeria’ cars that, to me, are going to be experimental? What would be the minimum safety and quality standards on these cars? Would they factor our perpetually bad roads into reckoning? Who would the safety regulators be, to ascertain that they meet minimum safety standards and requirements?

Before answering my last question, please remember we are still debating the effectiveness of those in the aviation sector. The prevalence of fake drugs have not been addressed, the power sector keeps deteriorating and we are paying more, the subsidy thieves are becoming the godfathers, we pay more than twice the world average for a bag of cement, the universities that should impart the knowledge needed for this policy is either on perpetual break or lacking the structure and manpower required to sustain such a lofty – but badly-phased – idea. This is a rushed job!

Just think about it!

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Debo Adejugbe is a trained Telecommunications/Electronics Engineer and a certified IT professional living in Lagos. Dad to amazing Hailey and an advocate against Sexual and Domestic Abuses. Debo has political sympathy for the Labour Party. He tweets from @deboadejugbe

 

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