Lagos — There is disquiet in the automobile industry following the decision of President Muhammadu Buhari to decline assent to the National Automotive Industry Development Plan (NAIDP) Bill, Daily Trust can report.
The withdrawal of assent into the Bill came after four years of legislative fireworks before the 8th National Assembly passed the Bill in 2017.
Almost two years after the Bill was passed by the National Assembly, there was uncertainty in the industry when the President failed to assent to the Bill.
But industry players and stakeholders were shocked when Buhari recently declined assent to the Bill. No reason was given for the decision.
To the stakeholders, the President's decision to assent to the Bill was an anti-climax in the efforts to attract foreign direct investment (FDI) through the Original Equipment Manufacturers (OEMs) into the industry.
Daily Trust learnt that the President declined assent into the Bill following a comment from the Nigeria Investment and Promotion Council (NIPC) querying the "pioneer status" granted to manufacturers.
Our correspondent gathered that the Bill provides a 10-year tax holiday for manufacturers and thus contradicts the Pioneer Status Act which is a fiscal incentive offered to companies in designated pioneer industries. The tax holiday, according to the Pioneer Status Act, is for a three-year period and can be extended for another one or two years.
But the Automotive Bill rejected by the President provides 10-year tax incentive which formed one of the bases for its rejection apart from opposition to the Bill by some "industry cabals".
Daily Trust however gathered that there are moves by some stakeholders to re-work the Bill and return it to the National Assembly because of the import of the Bill.
The NAIDP bill popularly known as Auto Policy, according to stakeholders, is central to the development of the automotive industry which is said to be currently under-performing.
Recent findings by Daily Trust showed that the sale of brand news cars has dwindled drastically with all auto dealerships selling less than 10,000 units of vehicles from 50,000 being sold four years ago.
Year in, year out the purchasing power of Nigerians for brand new cars has reduced even as prices of new vehicles have quadrupled.
However, stakeholders say the current dismal performance of the industry is traceable to the absence of a legal framework in form of a policy to attract OEMs into the country.
Besides, the policy if implemented would enable Nigerians access zero interest car loan as provided in the Bill.
"As it is now, we are back to square one", a senior official of one of the auto companies, said.
"It is a shame we find ourselves in this mess as some people are obviously benefitting from the sorry situation of our industry by flooding the country with used vehicles".
The source added that "the people of like-minds" are working tirelessly to re-present the Bill to the National Assembly after the observation made by the President has been sorted out.
A former Director of Policy and Planning at the National Automotive Design and Development Council (NADDC), Mr. Mahmud Luqman told Daily Trust that there is need to accommodate the suggestion of the NIPC and resubmit to the National Assembly.
"The only problem is the speed of legislation," he observed.
He reiterated that without the Bill, local investment in Assembly plant by many automotive brands would be a mirage.
"For the industry to gain traction FDI through the OEMs must be encouraged- This includes by way of legislation," Luqman added.
He urged those opposed to the Bill to "sheathe their swords" in the interest of the country, saying some elements who are opposed to the Bill are even in government.
"They should sheath their swords and let this policy work. Everybody seems to want to frustrate the few courageous investors so as to sack the policy. Most of them are agents of black market car dealers with paid agents in positions of influence," he said.