CEO of Autogig Worldwide Sources Restricted, Tope Ojo, tells JUSTICE OKAMGBA that the brand new auto coverage, which is but to be handed into legislation, should prioritise native manufacturing of automotive components
How would you assess the present state of the Nigerian automotive trade?
The trade is loaded with plenty of potential however coping with loads of challenges. It has been experiencing an absence of course for years. There’s additionally restricted consciousness amongst Nigerians in regards to the true potential of the trade.
Our insurance policies for improvement usually are not talking to one another; they don’t align with different aiding insurance policies. If you wish to drive an vehicle sector within the nation, you don’t want insurance policies that can rival or restrict the trade.
Now we have seen a state of affairs the place some insurance policies had been jettisoned simply to push one other trade completely. The trade has the capability for employment, growing the GDP of the nation.
Apparently, Nigerians eat vehicle merchandise in massive portions. Sadly, we rely majorly on importation. The tokunbo automobiles, the brand new automobiles and even down spare components markets are all imported. We simply want to begin location manufacturing of spare components in Nigeria.
I’ve been on this trade for near 20 years. After I noticed the Nationwide Automotive Business Growth Plan, I felt like there have been loads of alternatives on this house and what we might do to help the sector. It is among the main causes I began Autogig.
Do you suppose Nigeria’s automotive coverage will deal with the important points affecting the sector?
The auto coverage (2014- 2024) is just too ambiguous, which is why we couldn’t get one thing from it. There’s one other one (up to date coverage) that’s being rolled out. And should you analyse the earlier one, you’ll uncover that there’s not a lot distinction.
The coverage states that should you usher in a totally knocked-down (CKD) automobile, you pay import responsibility. In the event you import a semi-knocked-down (SKD) automobile, you pay 5 per cent. In the event you usher in a totally built-in automobile, you pay 70 per cent. Sooner or later, the federal government was simply specializing in the 70 per cent they get.
Once more, the individuals who have licenses to assemble automobiles that declare to be doing SKD are simply bringing in automobiles, in all probability eradicating the opposite components and assembling them right here. That is among the causes we have to transfer from SKD to CKD. Below the SKD, we’ve two disassembled knock-downs and medium knock-downs.
What we’ve right here is the previous, that means these automobiles have been constructed some place else and a few elements components are eliminated and shipped to Nigeria. The latter means the automobile doesn’t must be absolutely constructed in a foreign country. So, the auto firm will simply must get it shipped to Nigeria, after which individuals who can provide the engine and different components can do the availability. You’re constructing extra provide chains with this. There are loads of classes to study, plenty of jobs to create, and many others.
It’s not nearly bringing automobiles cheaper and promoting them; it’s about the way it impacts the trade. The federal government mustn’t additionally really feel relaxed as a result of they’re simply okay with getting the duties from the importers. No matter 70 per cent they’re getting now can’t be as much as 10 per cent of what they’ll get from a booming vehicle sector.
We will additionally give attention to the semi-knocked-down spare components as an alternative of automobiles. I’ve taken time to see many of the domestically assembled automobiles, and most of them come within the elements from the identical producer.
We nonetheless have the identical factor with tokunbo automobiles which might be utilizing the identical components from the identical firm. What stops us from asking them to return arrange their crops right here and manufacture their automotive components? Will probably be simpler for native producers to purchase from them.
How can we develop the native manufacturing sector?
There’s additionally one other side that Nigeria is just not exploring. Right here, when your alternator is dangerous, you throw it away and purchase one other one. When your compressor is dangerous, you purchase one other one, whereas these components will be rebuilt. In reality, one in every of our plans for this yr is to coach about 400 folks at no cost on learn how to rebuild these components. Now we have developed the capability to take action. Now, think about having these crops right here, it should handle accent repairs. Why can’t we develop capability for this?
Let’s think about having native assemblers produce 40,000 to 50,000 automobiles in Nigeria in a yr. Let’s say these automobiles have one alternator and one compressor. However for tokunbo automobiles which might be nonetheless beneath 10 years outdated which might be shipped into the nation can be about 5 occasions the variety of new automobiles which might be assembled right here. In addition they include these elements. For them, it’s a substitute half. Now we have to transcend assembling automobiles in Nigeria. We have to take a look at the entire worth chain.
In each coverage, there ought to be written targets and step-by-step on learn how to obtain them. I used to be opportune to see the UK’s coverage on electrical automobiles as a result of it states clearly learn how to get it achieved. The coverage ought to have integrated way more about automobile possession, and spare half improvement. The element improvement is what we have to take significantly. That’s the place the complete worth chain is. If you know the way to determine spare components, you may simply enhance it. You’ll be able to’t develop should you simply proceed to assemble automobiles. These are a number of the issues that ought to be elaborately spelt out.
We have to encourage automobile possession and get the assist of monetary establishments. Are you aware how many individuals will profit from the worth chain? That could be a massive market. It can drive employment, not like a rail system that in all probability runs interstate. That’s why our insurance policies must be talking to one another.
You probably have a vibrant vehicle trade, each different sector will fall in line. A automobile has at the very least 2,000 elements. You’ll be able to see the totally different chains. By the point you develop industries for a few of these automotive components, you should have pushed the industrialisation we’re clamouring for. Additionally it is a sector that calls for extra on our foreign exchange yearly.
Is the Nigerian market prepared for electrical automobiles?
There are nonetheless plenty of debates happening round this. Some massive auto companies are constructing electrical automobiles whereas some haven’t. I had the chance to talk with a senior government within the US and I requested him which space of funding Toyota is specializing in EVs, inside combustion engines, or hydro-powered automobiles. He simply laughed and stated they aren’t even positive of the longer term but, however the improvement is simply chopping throughout. They’re growing capability for all segments. So, that tells you a large number.
The lithium you utilize to fabricate batteries for electrical automobiles is mined someplace, which can be inflicting some challenges. However for Nigeria’s auto market, it’s not prepared for EVs. We have to give attention to our aggressive benefit and never play second fiddle. There are elements to take a look at.
What number of licensed EV technicians do we’ve within the nation? If you wish to work on BMW automobiles, for instance, you want to be BMW EV licensed. To work on Ford, it’s a must to be Ford licensed. Our trade continues to be far behind in that house. Now we have plenty of pure sources akin to tin, and lithium that must be harnessed. In case you are not there, you aren’t there. Allow us to focus and grasp our aggressive power. It’s higher to harness it to develop our financial system.
Whoever says he needs to develop EV will in all probability have patrons from some place else. However Nigeria is a humorous market. I’ve seen a few Tesla automobiles right here. Sure, there might be plenty of campaigns for EVs possibly attributable to subsidy removing and all that.
What’s the present demand for automotive abilities within the sector?
The hole when it comes to abilities wants severe consideration. One among our cores is coaching. It’s so costly that a mean Nigerian can’t afford it. That’s the reason we’ve to hunt grants and prepare at no cost. The trade wants well-trained professionals. A few technicians with secondary college {qualifications} bought job gives in Canada and Germany.
Denmark as we communicate is searching for mechanics. So, the demand is just not solely in Nigeria however globally. The most important situation is seeing mechanics as a occupation for low lives. So, that notion has affected the psyche of the folks. We have to begin making vocational abilities an enormous deal. We have to develop our mechanics as world-class.
How can the nation do to scale back the importation of pretty used automobiles?
It’s simply our want for luxurious automobiles right here. Folks want to purchase a luxurious automotive that’s 10 years outdated quite than a brand new automotive that isn’t luxurious. When you will have many individuals with this thought, there’ll at all times be a marketplace for it and the importation will proceed. The fact of the change charge is now having a rethink. It’s now costlier.
Clearing prices throughout the final one yr have elevated by over 80 per cent. So, it’s not even serving to the state of affairs. So long as we’ve extra imported used automobiles, which has made automobile possession easier, will probably be tough for demand for brand new automobiles to thrive till we discover a approach to encourage automobile possession for brand new automobiles.
How can the trade reap the benefits of the African Continental Free Commerce Space?
The AfCFTA was borne out of the need of African states to foster intra-African commerce and blur sure commerce boundaries which have through the years inhibited the graceful stream of enterprise transactions throughout totally different nations inside Africa.
Kenya and Ghana have began the take a look at run of that settlement. A battery manufacturing firm in Kenya shipped its battery to Ghana, that very same battery will be shipped to Nigeria. We simply must be deliberate and place ourselves to reap the benefits of the settlement.
We’re much more superior than many African nations however we don’t simply do what we have to do. That’s the reason I stated our insurance policies have to be talking to one another.
