Nigeria may become the automotive hub in West Africa if plans by the Federal Government to achieve this yields positive fruits in the next few months. The new plan seeks to bring the giant automaker, Volkswagen, back to Nigeria; many years after doldrums in the Nigerian economy saw the privatisation of both Volkswagen of Nigeria, Lagos and Peugeot automobile company in Kaduna.
Nigeria, with a population of almost 200 million, is the largest by population and the biggest economy in Africa. Yet, the country has no presence in the automotive industry. But, in a renewed effort to industrialise the country, the Federal Government is keenly interested in bringing Volkswagen back to Nigeria as a partner in the effort to make Nigeria the automotive hub for West Africa.
Key stakeholders from the public and private sectors in the country as well as senior management of Volkswagen led by Thomas Schaefer, the Head of Volkswagen for Sub-Saharan Region and Managing Director, Volkswagen South Africa, met at a workshop in Lagos recently to agree on the next steps to be taken to ensure that Nigeria becomes the automotive hub for West Africa.
Industry, Trade and Investment Minister, Okechukwu Enelamah, who led the Nigerian delegation to the meeting, said the development of the country’s automotive industry is a key plank of the Federal Government’s Economic Recovery and Growth Plan, which aims to grow the economy, invest in Nigerians and build a globally competitive economy.
With about $8 billion spent by Nigerians in importing vehicles annually, there is no doubting that Nigeria is a vibrant market for a viable automotive industry that will create jobs and contribute to the growth of the Nigerian economy.
According to the minister, the development of Nigeria into an automotive hub is an idea whose time has come and the presence of the strong Volkswagen delegation at the meeting led by Schaefer is an important show of commitment to make Nigeria’s partnership with the company successful and mutually beneficial.
Responding, Schaefer agreed that Nigeria’s time to be an automotive hub is now.
“Africa’s time is now and Nigeria’s time is now,” he said.
According to Schaefer, Volkswagen would be more than happy to play the pioneering role and be the role model that will spur the interest of other global players in the Nigerian automotive sector.
There is no doubting the ability of Nigeria to outperform the rest of the world. Experts believe that the fact that Nigeria currently does not have a thriving auto industry presents an opportunity for the country to perform exceedingly well as an automotive hub for West Africa. As Schaefer puts it: “the country can invest and prepare now in order to become ripe for the future.”
Volkswagen indicated at the meeting that its intentions for Nigeria would be dictated by demand for its brands and viability of the business in the country. Reports said the issues raised by Volkswagen was painstakingly addressed at the kickoff workshop with the discussion of various plans and strategies to ensure the growth of demand for new cars in the country, the incentives to be given, as well as reduction of running
cost.
Reports indicated that both Volkswagen and Nigeria were eager to get moving with the business. Consequently, three working groups were set up with the first group to address demand for Volkswagen in comparison with other brands of cars, the second group to address investment and the third group to examine operational cost.
Among the key stakeholders present at the meeting were the Permanent Secretary of the Federal Ministry of Industry, Trade and Investment, Edet Sunday Akpan; the Directors-General of the National Automotive Design and Development Council , Jelani Aliyu; Bank of Industry , Kayode Pitan; Standards Organisation of Nigeria , Osita Aboloma; and Nigeria Export Processing Zones Authority, Emmanuel Jime.
Others include the Programme Coordinator of the Industrial and Competitiveness Advisory Council, Edirin Akemu; Special Adviser to the Minister of Industry, Trade and Investment, Bunmi Adeoye; and representatives of the NIPC, Customs, FRSC, and the private sector.
Recall that the defunct Volkswagen of Nigeria made a debut in the early 1970s but became moribund when the country could no longer provide the foreign exchange needed to import CKD for both Volkswagen and Peugeot assembly plants. Both car assembly plants were later privatised, while Anambra Motors, assemblers of Mercedes trucks and the other privately owned truck assembly plants are tottering till
today.
In the meantime, Stallion Motors bought over Volkswagen premises on the outskirts of Lagos from where it was assembling Ashok Leyland buses. It later muted the idea of assembling Nissan Primera brand from the same facility. Unfortunately, the slowdown in the nation’s economy in the last four years dipped its hope of assembling Nissan cars at the site.
Going forward, there appears to be a good chance for a local automotive industry in Nigeria to thrive and perform well. The situation today is far different from what obtained in the late 1980’s in the country. At that time, the automotive industries needed import licence to bring in CKDs before they could produce.
Today, with a liberalised economy, the situation has changed. Any company that wants to import CKDs for local production of cars can do so if it can source foreign exchange from the banks or through private sources, depending on the arrangement struck with government and the CBN. It is therefore hoped that the stakeholders will put their acts together so that Volkswagen can enter the Nigerian market in a big way again.
