Chairman, Senate Committee on Privatisation and Bureau for Public Enterprise, Senator Ben Bruce has advised auto manufacturers in the country to embrace global trend by producing energy efficient vehicles.
Sen. Ben Bruce, who led members of his committee to VON Automobiles Limited, in Lagos, recently, said Nigeria cannot afford to be a dumping ground for obsolete technologies in the auto industry.
He said he drives an electric car, adding that the world was shifting to energy efficient and electric vehicles, stating that Nigeria should position itself to benefit from new technologies.
The Senator said it was important for government policies to encourage production of vehicles and their purchase by everybody who has a source of income, adding that it would be better for the economy.
He wondered why the government would have a policy that encouraged people to leave their country, and Nigerians “to invest all this money in the economy and then you turn against them; when it is time to buy vehicles, you buy vehicles that are imported and not those made in Nigeria; it makes no logical sense and it sends the wrong signal to potential investors that government cannot be trusted. You destroy the faith in the Nigeria economy.
As long as we treat investors badly, money will not come to Nigeria; Money will go to Switzerland, Brazil, Japan, America, China and elsewhere.”
He said as a private sector person and a Senator, “my obligational responsibility is to promote what is good about Nigeria and when you come to a facility like this, I’ve been to many facilities, this is world-class; a facility that produces these types of vehicles, what else can you ask for, but for a government to make it possible for them to invest, the least they can do is to support them.”
He said fresh graduates should be able to buy the smallest car. “Once you graduate, you go to the bank and get single digit interest, 10 per cent deposit and pay over seven years.
There will be no maintenance problem. With this, in addition to my request for energy efficient vehicles, we would have gotten something for Nigerians.”
On the effect of government policies on vehicle production in the country, the Managing Director of VON Automobiles Limited, Mr. Tokunbo Aromolaran said, “Manufacturing has been tough in this environment for the reason that specific attention has not been paid to our own peculiarities.
All the people that we compete against operate in an environment that makes it easy for them to access the things they need to put together to add value to their various environment, but here, you have to build your own power station, roads, water system, coming through the port is a hell, inflation affects us too, at 21 per cent, and when you put all these together, the cost of production is naturally higher.”
Aromolaran, who is Chairman, Nigerian Automotive Manufacturers Association (NAMA), said if the government wants to encourage the auto sector then “there should be preferential policies to ensure that people, who are getting Nigerians employed and assisting to put food on the table in millions of homes, should be encouraged to grow and grow faster. When they get past that threshold, then they can compete with anybody.
Now, we are not able to compete and that is why it is easier to import. For those who prefer to import, it is easy business. Nigerians are suffering; we are seeing people working in other countries while our own people are walking in the streets.”
He said if not that VON was strong enough, they would have been down-sizing by now because “there is no business. But we have taken a stance that we will keep our workers because we have spent millions training them and it does not make sense to invest in people and let them go.”
He said, “Right now we are bleeding. That is why working in manufacturing in this country right now is not the best situation you can have. We are hoping that government looks at the policy again that surrounds manufacturing, let’s have some preferential interest rates, let’s look at the FX allocation to allocate to sectors that generate something back for the country. We spend a lot of money paying for invisibles, most of our dollars pay for things nobody sees, and if they are not there we wouldn’t miss a thing. But there are those things that add value to us and if we can look at our policies again and redirect them, Nigeria will be better for it.”
Aromolaran said the preferential duties given to auto manufacturers through the Auto Policy should be improved upon, explaining that “for those of us who assemble either from completely knock down or semi knock down, government, through the Auto Policy, has put in place preferential duties; it was part of the suggestions we made to encourage local production.
That has helped so far, but we need to carry it further, the reason being that if we don’t achieve the volumes, then what we want in terms of lower prices will not manifest and what we are hoping is that Nigerians would be channeled towards buying locally produced cars, which means less of cars that have been used by other people for 10-15 or more years abroad; we are not second-class people; Nigerians are proud, hardworking people; they should have the opportunity to also buy brand new cars when they have worked hard in their lives.”
He said, “If the policy can be made wholesome, there is no need having a duty rebate alone, they must give us a wholesome environment where we can thrive, then the government will enjoy the benefit of it.”