The National Assembly and the National Automotive Design and Development Council have urged automotive companies to deepen backward integration to spur economic growth.
On Monday, the Senate Committee on Industry noted the companies’ challenges at an oversight visit to Dangote Sinotruk West Africa Limited, Wandel International Ltd (Simba Motorcycle Assembly Plant), and Nord Automobiles Ltd, all in Lagos.
The Vice Chairman of the Committee, Senator Shuaibu Lau, highlighted the importance of the automotive sector in job creation and economic development, saying “The oversight visit is aimed at helping the automotive industries because they are crucial to Nigeria’s economy.
“We are here to understand their challenges firsthand and ensure that solutions, be it legislation or executive advice, are provided to reduce production costs and expand operations.”
Lau emphasised the need for companies to accelerate backward integration efforts, adding, “In one of the companies, we saw significant progress in backward integration. For others, the efforts have started but need to gain momentum. Achieving this will not be easy, but it is attainable and necessary for sustainable growth.”
The Director-General of NADDC, Joseph Osanipin, reiterated Lau’s pledge to provide needed assistance to automakers as he called for a rise in the percentage of local components used in vehicle, motorcycle, and tricycle production.
Osanipin remarked, “We are impressed with the strides some companies have made, but more needs to be done. We told them when we come back by the first quarter of next year, we want to see some changes
“By 2025, we expect significant improvements in backward integration, leading to more job creation and a stronger economy. We want to see an increase in local content and a reduction in imported materials.”
Meanwhile, Dangote Sinotruk’s Senior General Manager of Human Asset Management, McDappa Ngo, lamented the industry’s challenges, noting the financial strain of competing with importers of fully built vehicles.
“You may come back next year and not find us here,” Ngo warned. “We have survived since 2014 because Aliko Dangote believes in Nigeria, but the company has not turned a profit. We need urgent government support to remain viable.”
In response, Senator Lau assured the company of legislative backing. “The National Assembly is committed to creating an enabling environment for you to compete globally,” he said. “We will promote policies that protect and encourage businesses like yours to thrive.”
At Wandel International Ltd, Senator Lau questioned the absence of locally produced materials despite the company benefiting from tariff concessions. He urged the company to expedite partnerships with local manufacturers.
Wandel’s Executive Director, Sohan Sharma, affirmed the company’s commitment to supporting the Nigerian economy. “We are in discussions with local manufacturers and remain optimistic about Nigeria’s economic prospects,” Sharma said, while also appealing for tax reductions to prevent price hikes in motorcycles and tricycles.
The Senate committee reiterated its dedication to addressing systemic challenges in the industry, including power supply and steel production, to support local manufacturers.
“We will continue to push for policies and legislation that encourage backward integration,” Senator Lau stated. “Our goal is to see the automotive industry significantly reduce its dependence on imports and emerge as a key driver of Nigeria’s industrial development.”
