Based on news reports, the House of Representatives recently resolved to constitute an ad hoc committee to investigate the collapse of automobile assembly plants in the country with the view of making insightful recommendations for the immediate resuscitation of the moribund plants. It is, however, unclear what this committee plans to look into almost a decade after the automotive policy was launched.
The Nigerian automotive policy was introduced in November 2013 to resuscitate Nigeria’s moribund automobile industry. The policy allows local assembly plants to import completely knocked-down vehicles at 0% duty and semi-knocked-down vehicles at 5% duty, while importers pay a 70% duty on new and previously owned vehicles. About 54 licenses were granted. Also, an accommodating tariff of 35% was imposed on cars imported by companies who have expressed interest and met investment milestones for local assembly.
The economic recession in which the country slumped into shortly after the automotive policy was introduced did not bode well for the resuscitation of the industry. The weakened exchange rate sent the prices of new cars far above the reach of Nigeria’s shrunk middle class.