Daily Mentor News

Policy Inconsistency and Bureaucracy Undermine NAIDP Implementation

A staggering $89.6 million (about N136 billion) in investments within Nigeria's automotive sector has become non-performing,representing $756 million invested by 58 firms during the first five years of the Nigerian Automotive Industry Development Plan (NAIDP) from 2014-2024.

Industry in Distress

Findings reveal that:

• 20 of 58 licensed assemblers have suspended operations

• Only 6 companies remain actively assembling vehicles

• 38 firms continue operations but at significantly reduced capacity

• Technical staff either redeployed to after-sales roles or laid off

Policy Paralysis

The NAIDP, which expired in 2024, has yet to be replaced despite:
✔ Designed to attract OEMs with incentives like zero-duty CKD imports
✔ Installed capacity of 500,000 vehicles annually (current output: 450,000)
✔ Potential to revolutionize local manufacturing and employment

Critical Challenges

Industry stakeholders identify multiple obstacles:

• Policy Instability: The 2020 Finance Act reversed key concessions
• Bureaucratic Bottlenecks: Delays in documentation and approvals
• Foreign Exchange Constraints: Limited access to FX for KD components
• Market Distortions: Rampant smuggling and used vehicle imports
• Infrastructure Deficits: High logistics costs, especially for inland assemblers

Expert Perspectives

Kunle Jaiyesimi (CFAO Motors):

"We've converted assembly staff to after-sales roles. The sector needs consistent policy direction to recover."

Prof. Samuel Odewumi (LASU):

"We're experiencing policy summersaults - motion without movement. Strategic vision is lacking."

Dr. Oscar Odiboh (Auto Consultant):

"Government must provide special waivers for SKD/CKD imports to make locally assembled vehicles competitive against 'Tokunbo' imports."

Path Forward

Industry analysts recommend:

• Urgent enactment of NAIDP 2024-2034 framework

  
  

  Strict enforcement of procurement policies favoring local assembly

  
  

  Establishment of automotive development fund

  
  

  Improved investor assurances through legislation

Stakeholder Alert

The National Automotive Design and Development Council (NADDC) has reportedly initiated the policy review process with the Ministry of Justice, though progress remains unclear.

The Guardian investigations confirm that Nigeria's auto industry potential remains largely untapped due to systemic challenges requiring immediate government intervention.

#AutoIndustry #NAIDP #NigeriaEconomy #IndustrialDevelopment

Sources: Transtech Industrial Consulting, NADDC, Industry Stakeholders