Experts in the automotive and transportation space have called on the government to focus on the issues affecting mobility of Nigerians as part of efforts to boost the economy.
The experts said the government must continue investment in the sector to achieve the desirable impacts of transportation on economic development.
They called for well-thought-out policies to address the sector’s multifaceted issues.
Associate Professor at Keele University, United Kingdom, Dr Emmanuel Mogaji, said the absence of a comprehensive transport policy has exacerbated existing problems, ranging from traffic congestion to inadequate public transportation infrastructure.
Mogaji said the government needed to formulate and implement a robust transport policy that considers the diverse needs of the population and provides a clear roadmap for addressing these issues.
He said the recent initiative of providing free transport during the holidays to alleviate the impact of austerity measures is commendable. However, it is essential to design and implement such programmes with foresight, ensuring that they are sustainable and do not create unintended consequences.
According to Mogaji, planning for the New Year is crucial to avoid a last-minute scramble and ensure the smooth execution of such initiatives.
He said the country’s transition to sustainable transportation must be prioritised, particularly considering the removal of the state fuel subsidy. The proposed deployment of compressed natural gas (CNG) and electric buses represents a positive step towards reducing carbon emissions and dependency on traditional fuels.
He noted that these plans must materialise, and the government should work towards creating an environment that supports the widespread adoption of eco-friendly transportation options.
According to him, addressing transportation challenges in Nigeria requires a holistic approach, starting with the formulation of a comprehensive transport policy.
He said the government should also carefully plan and execute initiatives like free transport during the holidays and prioritise the implementation of sustainable transportation solutions.
He said with these measures in place, Nigeria can move towards a more efficient, accessible, and environmentally friendly transportation system in the coming year.
Mamudu
Also speaking, Managing Partner Transtech Industrial Consulting, Luqman Mamudu, said activities in 2023 for the automotive industry did not quite recover from the negative impact of the 2020 Finance Act.
He said the act practically removed incentives to assemble vehicles in Nigeria; especially commercial vehicles. The total number of assembled vehicles continued to dwindle from its high of nearly 7,000 units in 2017/18. The tariff differential of 25 per cent was removed such that it made no commercial sense to import semi-knocked down (SKD) vehicles at 10 per cent when courtesy of the 2020 Finance Act, the import tariff for fully built trucks was 10 per cent as well.
Mamudu who doubles as the former Director of Policy and Acting Director General, the National Automotive Design and Development Council (NADDC), said the agencies responsible for the Nigeria Automotive programme implementation practically took their eyes off the ball. The consequence was that activities undermining the industry flourished unabated. This included massive importation of second-hand vehicles.
He said the assembly plants that have already invested and engaged in limited assembly stopped production on account of scarce foreign exchange to source SKD and completely knocked down (CKD) kits.
Mamudu said for 2024, he looks forward to increased activities, especially in the energy transition space.
He said the current government is desirous of supporting transportation in the light of subsidy removal on petrol prices. This includes emphasis and direct support for vehicle gas conversion.
Luckily, he noted that the assemblers have recently re-organised themselves to engage the government on this and other projects to drive demand, including the vehicles’ purchase scheme.
He said the NADDC is now headed by a stakeholder in the industry. The new DG is a former COO of Jet Motors.
“I expect that there will be a focus on the implementation of the Nigeria Automotive programme going forward. I have personally interacted with the agency and am convinced of its commitment to get the presidency to sign an investment confidence act for the automotive industry in Nigeria.
“This is all the global investors need to nurture existing pipelines already established in Nigeria directly, as in the case of Honda and CFAO for instance and through partnerships with Nigeria entrepreneurs like Coscharis, Mikano, Transit Support, ANAMMCO, Stallion, IPI, Kewalrams among others,” he said.
According to him, the African Continental Free Trade Area (AfCFTA) programme is expected to impact positively on production locally.
“I expect the Nigerian Automotive Manufacturers Association (NAMA) through partnership with the African Association of Automotive Manufacturers (AAAM) to align with the common economic region agenda. This will boost production based on market expansion and competition encouraged by the rules of origin clause in AfCFTA.”
He said: “I expect that with the passage of automotive investors’ confidence bills (NAIDP 2024) at the National Assembly and assent by the presidency, capacity utilisation will increase significantly.”
He said with increased capacity utilisation in assembly, local component manufacturers will find economic justification for investment in Nigeria to feed the assembly plants and aftermarket.
He, however, said: “I expect a more vibrant industry during the year, but a lot depends on NAMA and NADDC as they engage all stakeholders.”