The Federal Government of Nigeria is revving up its auto industry, aiming to shift production from partially assembled vehicles, Semi-Knocked Down (SKD), to fully built cars, Complete-Knocked Down (CKD), with more local parts. The National Automotive Design And Development Council (NADDC) Director-General, Oluwemimo Joseph Osanipin, announced this plan during a visit to Lanre Shittu Motors, a Lagos assembly plant. President Bola Ahmed Tinubu has directed government agencies to prioritize vehicles assembled in Nigeria, especially those powered by Compressed Natural Gas (CNG). This is part of a broader strategy to reduce reliance on imported vehicles and boost the domestic auto sector.
Further, the National Automotive Industry Development Plan (NAIDP) envisioned Nigeria transitioning beyond SKD assembly. Osanipin acknowledged the current lag and urged Nigerians to embrace locally assembled vehicles for increased domestic content. He cited the success of locally assembled trucks as an example and encouraged similar support for buses. The government’s CNG directive further incentivizes this shift. Osanipin commended Lanre Shittu Motors’ operations, highlighting their full SKD assembly process, including frame Construction and component integration. The company’s expansion plans, with a dedicated welding facility and a separate paint shop in Ogun State, further demonstrate their commitment to comprehensive local production.
A model for local production is Lanre Shittu Motors.
Lanre Shittu Motors’ managing director, Taiwo Shittu, emphasized the potential of CNG vehicles, especially after fuel subsidy removal. The company has already delivered CNG-powered airport shuttle buses and is converting existing vehicles to this fuel source. They see CNG as a cost-effective alternative, offering a 25% reduction in operation expenses. Shittu stressed the importance of after-sales support, highlighting their ₦2 billion spare parts inventory. He believes this was a major shortcoming for past domestic automakers and sees it as crucial for long-term success. Nigeria’s push towards a more robust auto industry, with increased local content and a focus on CNG vehicles, presents exciting opportunities.
Coupled with the efforts of companies like Lanre Shittu Motors, the government’s support could put Nigeria on the road to a thriving domestic auto sector. However, it has to start with government officials. Federal lawmakers faced criticism in 2023 for planning to buy luxury vehicles. Senator Karimi explained that senators and representatives choose foreign-made SUVs like Land Cruisers and Prados because of their “quality and durability.” Sunday Karimi, representing Kogi West in the 10th National Assembly, defended the decision, highlighting the reputation of foreign brands like Toyota for “quality and durability.” He acknowledged that lawmakers intend to support domestic manufacturers “as our local Manufacturing companies develop.”
Violation of RMAFC’s guidelines for vehicle allowances.
These lawmakers rejected cheaper sedan and saloon cars in favour of expensive luxury SUVs, violating the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC)’s guidelines for their vehicle allowances. According to Section 84 of the Nigerian 1999 Constitution, RMAFC determines the Salaries and allowances for public officials, including lawmakers. The RMAFC publishes details of remuneration packages, including an optional car Loan capped at 400% of lawmakers’ annual basic salaries. For instance, a senator with an annual basic salary of ₦2.02 million is entitled to a car loan of up to ₦8.1 million. Similarly, a House member with a ₦1.9 million salary can receive a car loan of up to ₦7.9 million.
Despite Nigeria’s tough economic situation, the 10th National Assembly members chose to buy luxury vehicles for “legislative oversight,” which many Nigerians view as insensitive. House of Representatives spokesperson Akin Rotimi stated that the vehicles would remain National Assembly property until 2027, after which lawmakers can buy them by paying the remaining value. Despite constitutional provisions, the National Assembly has set allowances higher than RMAFC recommendations. For example, senators received ₦2 million each as a recess allowance, exceeding the legally prescribed 10% of their annual basic salary.
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In 2015, the Senate spent ₦4.7 billion on cars, diverting funds that could have been used for public services like vaccinations and electricity. The National Assembly has a history of purchasing vehicles above RMAFC’s recommendations, choosing SUVs this time, which have become a status symbol among Nigerian politicians. The decision to buy foreign brands has drawn criticism for not supporting the local automobile industry. The Centre for Social Justice highlighted that lawmakers exported jobs by choosing foreign vehicles over Nigerian brands. Oluwatobi Ajayi, CEO of Nord Motors, expressed disappointment, noting that local manufacturers had proposed their vehicles to lawmakers but were ignored. Nigeria’s automobile industry has grown with brands like Innoson, Nords, and Pro-Force producing high-end vehicles, including SUVs. However, lawmakers’ preference for luxury foreign brands appears disconnected from Nigeria’s economic realities and calls to reduce the cost of governance.