Monday, 23 March 2015

Another hogwash

Director General of the National Automotive Council (NAC), Aminu Jalal was in Lagos a few days ago to explain his council's failure to implement the new national automotive policy and shift in date for application of the additional 35% levy imposed on used vehicles to July 1.
If you ask me, the auto policy was dead on arrival and NAC is a failed federal government agency that has no relevance in modern day economy spectrum.
For one, NAC has collected several billions of naira under the 2% NAC levy imposed by the government. The levy was ostensibly imposed by government to create a pool of fund to develop the local auto industry. Until its suspension in 2011, it is estimated that not less than N50billion must have accrued into NAC's coffers from the levy. What has the agency done with this substantial sum? Where is the auto industry it developed?
It would be recalled that after the Minister of Industry, Olusegun Aganga, misled the President into approving the much criticized auto policy in 2013, several well meaning persons and interest groups warned of a looming danger to the transportation sector. Aganga had promised that by mid-2014, automobile assembly plants in Nigeria would begin to roll out made in Nigeria vehicles which could be purchased at affordable prices by Nigerians and possibly open a new export window for the country.
The grand deception was elevated when on May 29, 2014 Aganga led Stallion Group to present 'Nigerian-made' models of Nissan vehicles in commemoration of the nation's Democracy Day. It was claimed at the time that Stallion's automobile facility in Lagos was targeting to produce 45,000 vehicles annually and production was expected to commence after six months. Nothing has been heard of that promise 10 months after.
The failure of the auto policy is made manifest is the constant shifts in its implementation date. Jalal told us in 2014 that implementation would commence on April 1, 2014. Two weeks to the date, he announced a shift to July 2014 and before anyone could spell NAC, Jalal announced January 1, 2015. In January, he announced April 1 implementation date and early March, he made another volte-face and announced July 1 as the new takeoff date.
So Jalal came to Lagos to explain that the delayed implementation of the policy was to enable local assembly plants more time to roll out their products so as not to create gap between demand and supply.
"We all know that three quarter of the vehicle import is used vehicle, so government did not want to raise the levy on used vehicles before the assembly plants produce more vehicles and the financing scheme is in place. That is why the minister was given approval to delay it until we meet certain conditions. That is why the full levy is not charged on used vehicles," he said.
But truth is Jalal doesn't know anything. Jalal and his boss Aganga are taking Nigerians for a ride. Is he aware for instance that the constant policy summersault he represents is costing this nation dearly?
Does Jalal know that the auto policy has increased the rate at which cars are smuggled into Nigeria? Does he know that Nigerian ports have lost close to 70% of their vehicle cargo traffic to Cotonou Port, and that the vehicles landed in Cotonou eventually find their way into the Nigerian market? Does he know the implication of this trend on Customs revenue and on the income of our port authority, terminal operators, port workers, freight forwarders and haulage firms?
History tells us that this policy will not work. We have gone through this route before and it failed. Why will Jalal and Aganga not listen to the voice of reason?
Do these men understand that the prices of vehicles have already shot through the roof by as much as 40%? For example, a new KIA Piccanto car that sold for about N1.6million before the introduction of the loathsome policy now sells for N2.2million while a Hyundai Elantra which cost N3.3million now sells for N4.9million.
Do they know that this trend will make life a lot more difficult for the common man as the cost of transportation is bound to skyrocket and thus heighten inflation in the country?
Whose interests are Aganga and Jalal protecting really? The interests of Nigerians or of auto importers or Benin Republic?
President Jonathan must live up to his promise of stopping the policy right on its track as he promised a year ago.
The President assured Nigerians when members of the Road Transport Employers Association of Nigeria (RTEAN) visited him in January 2014 that he would not support any policy "that will increase the hardship of Nigerians".
"If that comes up, I will abort it even midway because we cannot come up with a policy that will make Nigerians suffer or pay higher prices for vehicles," were the exact words Mr. President during the visit.

Your Excellency, they won't tell you the truth but it has happened. Aganga's auto policy has increased the cost of vehicles, cost of transportation and the hardship faced by Nigerians. It is time to 'abort' it.

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