The federal government has begun the phasing out of used cars (otherwise known as "tokunbo") which may lead to the eventual stoppage of importation of used cars into the country.
The move, which received the nod of the Federal Executive Council (FEC) yesterday, was contained in a new National Automotive Policy which was endorsed in a meeting chaired by President Goodluck Jonathan at the State House.
Announcing the decision after the FEC meeting, minister of industry, trade and investment Olusegun Aganga said the policy, which was drawn over the last nine months with the input of the National Automotive Council (NAC) and foreign car manufacturers such as Toyota, Nissan and Honda, would encourage local manufacturing of vehicles and enforce a gradual phasing out of used cars.
Briefing journalists alongside his information and FCT counterparts Labaran Maku and Senator Bala Mohammed, Aganga said the Federal Road Safety Corps (FRSC) would kick off a new vehicle car registration/tracking system in the next two weeks to check the smuggling of used cars into the country.
He said that the federal government was worried that with the country spending a whopping $4.2 billion (about N550billion) on the importation of cars in 2010, and $3.4 billion on the item in 2012, car importation was almost head-to-head with machinery as the biggest consumer of the country's foreign reserves.
Aganga said government would encourage banks to operate vehicle purchase schemes to enable Nigerians to buy cars on easy terms with payment in instalments.
He informed that government would put in place appropriate tariff regimes to discourage car importation and encourage local manufacturing.
The minister disclosed that the new policy would run as a 10-year plan and would be reviewed every five years, adding that Nigeria and Bangladesh were among the few countries without national automotive policies.
According to him, highpoints of the new policy include the establishment of three automotive clusters in three parts of the country, namely, Ogun and Lagos states, Kano and Kaduna states and Enugu and Anambra states, pointing out that the establishment of the automotive clusters would reduce the cost of investments and production. In addition, the policy would encourage the revival of the petrochemical and metal/steel sectors and tyre manufacturing industries, he said.
Aganga revealed that the Industrial Training Fund (ITF) was collaborating with Cena, a vehicle manufacturer in Brazil, to open automotive training centres in Nigeria.
This is just as two Nigerian universities had been designated to commence degree programmes in auto-mechanical engineering to provide adequate local manpower
The minister said that government's projection was that, with strict implementation of the policy, a brand new car locally produced would sell for less than N1.5 million.
He said the policy when fully implemented would also create a minimum of 700,000 job opportunities.
According to him, a similar policy in the country in the 1970s during which new Peugeot and Volkswagen cars were produced locally and were affordable for average citizens failed as a result of the lack of infrastructure, non-implementation, inappropriate tariff regime, among others, assuring that government had identified the pitfalls and would put forward measures that would guard against the inadequacies and encourage the success of the new policy.
Aganga said countries such as South Africa, India and Brazil had successfully operated the policy.
Doles out N41.4bn for road, infrastructure in FCT
Meanwhile, FEC also approved N39,829,749,225.69 for the rehabilitation and expansion of the outer southern expressway (OSEX) from Villa Roundabout in Abuja to the OSEX/Ring Road 1(RR1) junction including five interchanges.
The contract which was approved in favour of Messrs CGZ Nig Ltd. will ensure the free flow of traffic and significantly reduce travel time in and out of the city.
The FCT minister also noted that the existing segment of the OSEX from the villa roundabout to RR1 is only partially developed with a 2-lane main carriage way and one 2-lane service carriageway as against the 10-lane expressway provided in the Abuja master plan.
Mohammed further stated that FEC also approved the provision of engineering infrastructure to Plot 4075, Asokoro Extension (comprising 50 plots), Abuja, in favour of Messrs COAN (W.A) Ltd at the sum of N1,683,258,423.00 with a completion period of 12 months.
He added that government had already provided engineering infrastructure to virtually all the residential districts of phase 1 of the Federal Capital City (FCC).
According to him, the outstanding areas without infrastructure are mostly areas where large plots have been redesigned and sub-divided into smaller plots and allocated to the general public.
He said Plot 4075, Cadastral Zone B04 in Asokoro District Extension is one of the large plots which has been redesigned and sub-divided into 50 smaller residential plots.
He said, "The employment generation opportunity that would emanate from the construction activities following the implementation of the project is expected to be in the neighourhood of 450 employees."