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Nigeria’s Automobile Industry Properly Positioned To Take Advantage Of AfCFTA—Aliyu, NADDC Boss

Mr. Jelani Aliyu, is the Director General, National Automotive Design and Development Council (NADDC), who is working assiduously to turn Nigeria into an auto hub. He appears girded and fitted to bring to fruition the chapter of auto boom that has been forecasted for Nigeria. An automobile genius, he was the lead exterior designer in General Motors – an American auto manufacturing giant for many years. He designed the Chevrolet Volt, the car that has been described as a modern-day revolutionary vehicle that would change the world, from the stable of General Motors. The design emerged the best from hundreds of entries from the auto company’s three advanced studious in the United States and the United Kingdom. He was, for many years, one of Nigeria’s best brain exports to the world. In this interview with THE COMMERCE AFRICA, he spoke on his agenda for the auto industry, how they are being implemented and steps being taken to take to make Nigeria an auto hub following the implementation of the African Continental Free Trade Agreement. EXCERPTS…

Let’s take you back a little, during your first appointment as NADDC DG, what were some of the goals you set out to achieve for the automotive industry?

They were to ensure that the assembly production of vehicles in Nigeria grows and becomes sustainable by supporting companies that already exist to be more profitable and encourage new entrants into the industry to put more efforts on Nigerian youths who have talents in automotive sector to empower them and work towards setting up infrastructure and facilities that allow us to make a difference in the lives of Nigerian youths.

The plan was to also understand prevailing automotive advanced technologies and work towards adopting them and promoting their development and usage and sustainability in Nigeria.

With all these goals that you have highlighted, what strategies did you put in place to achieve some of them?

When you look at the NAIDP (National Automotive Industry Development Plan), which has the main focus of promoting local production, as against the continued importation of vehicles, especially, used ones, key to that is investment promotion. So how do you encourage either more direct investment or local investment into the Automotive sector? How do you encourage either the scaling up of the industry or like I mentioned earlier, new entrants, new investment into it?

We have been able to do that. By 2019, the investment had grown up to at least $1bn and a number of companies such as Dangote, Sinotrucks, Elizade, Lanre Shittu,Honda West Africa, Innoson have all grown.

Some new entrants have come to the Industry, such as Mikano Geely, Nord Automobile,Mikano in Otta,Nord in Lagos. We have companies that have started producing tires here; Innoson has expanded to include a semi- automated assembly plant in Nnewi where he produces the Ambulances that have been critical in fighting Covid-19 last year. He is about to roll out a rubberized-paint shop. Nord automobile came into the scene recently, so also Mikano as I mentioned.

So, there has been quite a bit of development. Nigeria has also entered the League Of Nations that are actively involved in renewable energy, sustainable energy by the assembly of Hyundai Kona Electric. It was launched and unveiled by His Excellency, Otunba Richard Adeniyi Adebayo, Hon. Minister of Industry, Trade and Investment. So, these are some of the good progresses that have been made.

We have also developed and launched two 100 per cent solar powered electric vehicle charging stations in Sokoto and Lagos. A lot of activities are going on. We have built 6 automotive training centers, one in each of the six geopolitical zones of the country: Abakaliki, for South East; Oshogbo, for South west; Benin, South-South; North Central, Lokoja; North East, Bauchi; North West, Zamfara.

These are the six that are already built. We are entering the second phase and we are building 12 more in more states. So, quite a lot has happened as we continue to implement the NAIDP and continue to strengthen the Nigerian automotive sector.

To what extent has some of these strategies assisted you to achieve some of these goals in line with the Federal Government’s Automotive Policy?

We are. Nonetheless, we continue to look at how we can intensify our efforts, and how we can continue to get more support from all relevant government and private stakeholders, how to further understand the prevailing industrial strategies and patterns around the world and how they can be applied to the Nigeria Automotive sector.

We are happy with our progress. But, nonetheless, we are not complacent. We continue with utmost commitment and speed to achieve greater success.

Since the commencement of the
National Automotive Industry Development Plan in 2013, what is the level of investment that has been attracted into the sector, and how has it translated into job creation for Nigerians?

Let’s go back to the 70’s and 80’s when we had Peugeot, Volkswagen, Anamco, Leyland. Back then, we were producing good numbers of vehicles per year and things were looking up. Then, for no fault of either the automotive companies or government, things started to go down. Why? In 1986, the price of crude oil crashed, from $27 to below $10. Nigeria was so dependent on crude oil and because of that , the country went into a recession, overnight! Overnight, Nigerians became poor and could no longer buy the 504 or Beetle. So, Peugeot, Volkswagen, Anamco, had to close and leave, not because they loved to go, not because government said stop producing, not that Nigerians said they didn’t want to buy the vehicles. But Nigerians couldn’t buy those vehicles because of economic downturns. So, things went sour and production came down virtually to zero, ground to a halt. The Federal Government said, no, this can’t happen. So, the NADDC strategized and came up with the National Automotive Industry Development Plan and we got necessary approval to start implementation.
As a result that, as of 2019, it will be higher now, at least, $1bn has been invested over N500bn by these companies that I mentioned: Dangote, Sinotruck, Innoson, Lange Shittu, Honda, Kojo Motors, PAN .

The industry has been revived and we believe that at least, 50 or more thousands jobs have been created, directly or indirectly in the automotive sector. These companies have combined built capacity of 400,000 vehicles per year.

Despite the significant milestones achieved by the NADDC under your leadership to transform the auto sector, there is this penchant by most Nigerians to patronise imported automobiles. Statistics showed that over $8bn is being spent annually to import between 350 and 400 cars into the country. What steps are being taken to encourage demand for locally produced vehicles and conserve foreign exchange spent imported vehicles?

That is definitely a trend that we cannot sustain to continue to pay that huge amount every year to buy vehicles overseas. It is detrimental to the economy and the wellbeing of the nation. Each time you bring in a fully built vehicle, whether new or used, you are not just taking funds out, you are exporting the future, job opportunities, and starving Nigerians of those opportunities. This is because, to build a car, it needs you to hire people to work for you, assemble and build that vehicle. If you do it outside Nigeria, you are paying people outside Nigeria while you have young people on the streets in Nigeria without jobs, he sees you take the money out, come back and drive the car in front of him.

But, if you build that vehicle, even if you merely assemble it here, you create jobs, you have given them opportunities to also add value to their lives and the economy. You starve your country and economy of opportunities and future when you build the vehicles outside and bring them in. You even lose out on technology and its transfer. But, when you build the vehicle in Nigeria, you are adding value. So, one of our biggest hurdles and challenges is the continued importation of used vehicles that offer disadvantage to the vehicles assembled or produced in Nigeria.
Especially, these used vehicles, some of them are twenty or more years old, they come in, and people buy twenty or more years old vehicles and are always with the mechanic, it takes away time, it takes away from productivity , and generally, it negatively affects the economy. So, one of the biggest challenges is the continued importation of vehicles. We need to regulate that to such a degree that it allows us to have the opportunity to look inwards and buy those vehicles that are assembled or built in the nation.

Recently, the NADDC was reported to be discussing with Jaiz Bank Plc and Zenith Bank Plc on a N5bn revolving vehicle financing scheme that would enable interested Nigerians to take a loan to purchase new locally assembled cars. Has the scheme taken off and how many people have benefitted from it so far?

It’s about to take off, God willing, what we are offering is single digit vehicle Finance. Nothing more than 9% interest rate to be paid over four or five years. These are very dramatic rates and that is why we are closely in discussion with Wema, Jaiz and Zenith. Typically, banks don’t do that, they offer much higher interest rates. But we are asking them to offer low interest rates and stretch the payment over 4-5 years.

They are sort of stringent on our part, but we believe that’s the only way to add value to the Nigerian public. So far, we have reached an MOA stage with Jaiz, we also hope to get to that stage too with Wema and Zenith. With MOA with Jaiz, we are just waiting for the final approval from our supervisory bodies to go ahead. Nevertheless, we need a huge intervention from the Federal Government. The Federal Government has done intervention for Sugar, rice and cement. We believe the Automotive sector equally requires such a huge intervention towards vehicle financing and other investment related interventions that help both the producers and end-users.

There seems to be a focus on gas lately with the implementation of the auto-gas conversion programme of the Federal Government. How is the NADDC positioning the auto industry to take advantage of this new initiative of the Federal Government?

This is an excellent development for us and we are very happy that the Federal Government has launched the National Gas Expansion Program. As you aware, we have huge reserve of natural gas, the highest in Africa and one of the top ten in the world.

So, historically, this gas reserve have been sort of wasted by flaring them and that is why the Federal Government sees it necessary to leverage those huge resources. What better way to do than to meet those targets than to power our vehicles with auto gas; CNG, LPG .We at NADDC are strong stakeholders in this program on a number of fronts. One, we are working with the Federal Ministry Of Petroleum Resources and the Vice President Office to promote the use of CNG and LPG.

So far, we are working towards seeing how we can promote the production of kits in Nigeria so that you can convert from diesel and petrol to gas. Just about a couple of weeks ago, we launched the awareness program on the use of auto gas to sensitize the public on how safe and advantageous auto gas is over petrol and diesel. We had successful event and the information continues to reverberate across the country. But, even more importantly, we have incredible stakeholders that work with us. Omah Vehicle, a Division Of kodjo Motors has introduced and has started to produce gas powered vehicles right out of the factory. So, as we speak, on the market today, one of our indigenous automotive companies is already producing gas CNG powered vehicles in Nigeria. You will agree that, that is a significant milestone

With Nigeria’s signing of the African Continental Free Trade Agreement, one of the objectives of government is to make the country an automotive hub in Africa. What steps are being taken currently to achieve this?

Fundamentally, the implementation of NAIDP. What NAIDP does is that it creates a comprehensive eco-system necessary for the sustainability of the automotive sector.
When you do that, you create the right environment for companies to come in for individuals and parties to invest, grow, become successful and provide those products and vehicles that can be sold locally and outside the country. So far, two of our stakeholders, Pro-force and Innoson are already selling their vehicles in other African countries; Mali, South Sudan and other African countries. So, the Nigerian Automotive sector has already started the export of its products to African countries.

There is inter African Trade Fair coming up in South Africa and we see it as another opportunity to further promote Nigerian Made vehicles to the rest of Africa. Nigeria is in a very good position geographically and otherwise to be able to take advantage of the AfCFTA because we have a lot to offer.
We already have, like I mentioned, a number of companies already producing in Nigeria. Like I said earlier, Pro-force and Innoson are already exporting. I have discussed recently with other companies that could easily sell their vehicles across Africa. We believe this event coming up in South Africa will give them that window, that opportunity to understand markets for their products.

Despite the fact that the power sector is still in a very bad shape, the NADDC under your leadership is spearheading the manufacturing of electric vehicles. How prepared are we as a country for this transformation considering the power sector challenges?

Electric vehicles are crucial. As you know, for Nigeria, in 2016, we signed the Paris Accord. This is the agreement on the mitigation of greenhouse gases that countries that signed should do all that is possible to reduce harmful emissions from vehicles and factories. You know vehicles emit carbon dioxide, Carbon monoxide, methane and other harmful gases that are bad for health. So, one of the quickest ways to meet those targets is to go green in terms of renewable energy, in terms of vehicle electrification.

Because, now you are dealing with zero emission. You are not just talking of cutting, you going straight to Zero. So, we felt, it is very necessary that we as a Council really promote vehicle electrification, the use of,, adoption, Development and sustainability of electric vehicles.

When we started to talk about that, people thought we were crazy just as you mentioned. We have power problems, where will these vehicles be charged? We said, yes, we may be crazy, Nigeria has power problems, but, like I always say, those are just problems, they are challenges, they are not us. We are bigger than those challenges. We will not allow ourselves to be defined by our current problems, we will only be defined by our dreams and aspirations and by what we can achieve.

It is not about what is in front of me, but, what can be in front of me. So, we went ahead. We kept promoting the production of electric vehicles and Hyundai Nigeria stepped up and started assembling electric vehicle conac and after that Jet systems came up with electric delivery van. It is now undergoing testing by GIG logistics in their Lagos zone.
Another company out of Lagos is also looking at introducing their own electric vehicles. So, we now said, back to the challenge of how to power those vehicles. We looked around, looked up and we saw the sun. We said we can leverage solar energy for powering these vehicles.

That is why we strategized, we designed and built and commissioned this 100% solar powered electric vehicle charging station. The first one in Usman Dan folio University, the second one, in University Of Lagos and the third one is coming up at the Nigerian University, Nsukka.

Why did we choose to put them in the Universities? It was because we said this is a technology now, but, want it to be better, bigger, more applicable to Nigeria and Africa. So, we put it in the Universities so we engage the young Nigerians and academia to see this technology and say we can do it better and come up with better solution and get that technology transfer going. So, yes, we have problems, but, as a nation, as a people, we are bigger than those problems and if we put our heads together, we can come up with the right solutions.

What should the auto industry expect from the NADDC going forward under your leadership?

That will be that I have played my role and really making a difference in the Automotive sector, in terms of vehicle electrification, to have a high percentage of vehicles in Nigeria being electric, and moving on any new endeavor in automotive sector will be electric.

Those that are already established we want to them to transit to electric vehicle production and not just produce vehicles but I want young Nigerians to actively participate in the development of these types of vehicles that are actually produced in the country. You can produce, you can manufacture every nut and bolts, but until you get to a phase where it is actually the people from that nation doing that development, coming up with the solutions, innovating, you have only gone halfway.

We have already started that. We will be leveraging these automotive training centers to engage more and more Nigerians into the Science and art of vehicle design and development, most especially vehicle electrification but, also doing training in on computer aided design for young Nigerians across the country. We hope to intensify that to really get young Nigerians into the automotive game.
We want Nigeria, not just be an Automotive hub in Africa, but to be able to play her role in the global chain for automotive production.

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