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Strategies to fix Nigeria’s automobile industry

Tope Ojo's prescription for a Made-in-Nigeria auto boom

David Ijaseun by David Ijaseun
March 17, 2024
in Business, Premium
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How to Fix Nigeria's automobile industry

How to Fix Nigeria's automobile industry

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Tope Ojo, CEO of Autogig International Resources Limited, sees a bright future for Nigeria’s automobile industry, but only with the right policies in place. In a recent interview with Punch Newspaper, Ojo outlined key challenges and proposed solutions to propel the sector forward.

“The industry is laden with untapped potential, but has long grappled with a lack of clear direction,” Ojo said. “Our policies for development are disjointed, failing to harmonize with complementary measures. To truly drive the automobile sector forward, policies must align with industry needs and aspirations.”

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One key area of focus, according to Ojo, is local production of car parts within the new auto policy. “Nigerians have a robust appetite for automobile products, yet we predominantly depend on imports,” Ojo lamented. “From ‘Tokunbo’ vehicles [referring to used imported cars] to new cars and spare parts, our market is inundated with imports. The imperative shift lies in initiating local production of spare parts within Nigeria.”

Ojo, with nearly two decades of experience, also criticized the ambiguity surrounding the National Automotive Industry Development Plan (NAIDP). “The current policy lacks clarity and coherence, impeding tangible progress within the sector,” he noted. “There is a pressing need for an updated policy framework that addresses critical sectoral issues comprehensively.”

Beyond policy changes, Ojo emphasized the importance of fostering a robust domestic manufacturing ecosystem. He advocated for a shift from the current Semi-Knocked Down (SKD) model, where partially assembled vehicles are imported, to Completely Knocked Down (CKD) vehicles.

How to Fix Nigeria's automobile industry
“Nigeria’s automobile industry: Car manufacturing plant

“Under the SKD model, some assemblers merely import partially disassembled vehicles, hindering indigenous manufacturing capabilities,” Ojo explained. “Transitioning to CKD facilitates a robust supply chain ecosystem, fostering job creation and industrial growth.”

Looking towards the future, Ojo acknowledged the growing trend of electric vehicles (EVs) globally. However, he stressed the importance of leveraging Nigeria’s unique strengths.

“While EVs represent a burgeoning global trend, Nigeria’s automotive landscape necessitates a strategic focus on our comparative strengths,” Ojo asserted. “Harnessing abundant natural resources and enhancing technical capacities are pivotal prerequisites for sustainable industry development.”

Workforce development is another crucial element, according to Ojo. He highlighted the need for accessible vocational training programs to bridge the skills gap.

“The dearth of skilled professionals poses a formidable challenge to sectoral growth,” Ojo remarked. “Empowering technicians through accessible training initiatives is paramount to cultivating a proficient workforce capable of driving industry innovation.”

Ojo also proposed strategies to address the influx of used vehicles, suggesting incentives for new car ownership.

“The pervasive allure of luxury imports undermines domestic manufacturing prospects,” Ojo noted. “Mitigating importation incentives and enhancing affordability mechanisms are pivotal steps toward stimulating demand for new vehicles.”

Finally, Ojo underscored Nigeria’s potential to capitalize on the African Continental Free Trade Area (AfCFTA).

“The AfCFTA heralds a new era of regional economic integration, offering unprecedented avenues for intra-continental commerce,” Ojo observed. “Nigeria must position itself strategically to leverage the AfCFTA’s transformative potential, aligning domestic policies with broader regional objectives.”

As Nigeria looks to revitalize its automotive sector, Tope Ojo’s insights offer a clear roadmap for a future fueled by innovation, self-sufficiency, and a thriving domestic auto industry.

Read more on Egoras upgrades electric vehicle charging in Nigeria with blockchain-powered Egostation

Tags: Around Africaautomobile industryEV

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