The Federal Authorities has introduced plans to purchase solely domestically assembled vehicles and discontinue the acquisition of imported international ones for its use, as a part of its bid to advertise its coverage on the native auto business.
In line with a report by Punch, this was disclosed by President Muhammadu Buhari in a speech delivered by Vice President Yemi Osinbajo, on Monday, November 23, 2020, on the opening session of the twenty sixth Nigerian Financial Summit Group (NESG) Convention themed: “Constructing Partnerships for Resilience”
Osinbajo additionally defined that the Federal Authorities would purchase domestically assembled vehicles fairly than imported international ones.
In his response on the problem of import duties which was raised on the summit throughout his presentation, the Vice President defined that the discount of import obligation on autos would assist scale back the price of transportation.
Osinbajo mentioned, “The purpose of the discount in levies on motor autos, business autos for transportation is to cut back the price of transportation by decreasing the price of autos.
“With subsidy elimination and the rise in gasoline worth and the pass-through to meals costs, transportation prices needed to be lowered. Now the automotive coverage is directed at localizing the manufacturing of autos.
“So, the logic was to extend the obligation and levies, in order that native manufacturing turns into extra aggressive. However the annual demand for autos is about 720,000 autos per yr. Precise native manufacturing is 14,000 autos a yr.”
Osinbajo identified that the nation’s native manufacturing capability is grossly insufficient to satisfy critical nationwide wants and this could finally result in increased costs of autos and extra stress on different sectors of the financial system that relies on transportation.
It may be recalled that in one in all her outings, the Minister for Finance, Price range and Nationwide Planning, Zainab Ahmed, revealed that the most important reason for the rise in inflation charge within the nation is elevated transportation prices.
Osinbajo, nonetheless, said that the federal government was not giving up on the native auto business.
“Two necessary issues to notice, the primary is that we nonetheless have a comparatively excessive obligation at 35 per cent; So, there’s nonetheless a disincentive for importation,” he mentioned.
He added that the federal government was additionally selling a coverage of shopping for solely domestically manufactured vehicles. “The introduction of a brand new automotive coverage in 2013, which is at the moment up for overview, was geared in the direction of discouraging the importation of wholly assembled vehicles and inspiring native manufacturing. It particularly permits native meeting crops to import fully knocked down autos at 0% import obligation and semi-knocked down autos at 5% import obligation, whereas importers pays 70% on new and pretty used autos.”