The National Automotive Design and Development Council has said that the disbursement of the N20bn consumer credit fund that would enable Nigerians to purchase locally-assembled automobiles will begin in January next year.
The Director-General of NADDC, Mr Joseph Osanipin, disclosed this to journalists at its 2024 end of year media briefing on Friday in Abuja.
The Nigerian Consumer Credit Corporation (CREDICORP) and the National Automotive Design and Development Council (NADDC) had two week ago kicked off the first phase of the initiative.
The scheme had kicked off with the signing of agreements with leading local automobile manufacturers including Innoson, Nord, CIG (GAC), PAN, Mikano, Jets, NEV (electric), and DAG.
The targeted initiative empowers Nigerians with credit to own new automobiles (cars, tricycles, motorbikes) while growing Nigeria’s automotive industry.
Addressing journalists on the initiative, Osanipin said the loan would be given to Nigerians at a low interest rate in a manner that would enable the fund to bw repaid with ease.
This is just as he assured Nigerians of the Federal Government’s commitment to addressing the infrastructure gaps hindering the widespread adoption of Compressed Natural Gas (CNG).
Osanipin acknowledged that the current infrastructure could not fully support the demand for CNG, adding that significant investments were being made to bridge the gap.
“The infrastructure we have currently cannot 100 per cent support the demand for CNG. However, the federal government is working seriously on that.
“On September 30, the government released N122nn to assist investors and stakeholders across Nigeria’s geopolitical zones to provide the necessary infrastructure for CNG,” he said.
According to Osanipin, building infrastructure, akin to constructing the foundation of a house, often goes unnoticed until tangible results are visible.
“A lot of investments are going into the provision of infrastructure to support gas. Once these projects are completed, we will begin to see the results in the near future.
“Companies like NIPCO, which have been in the gas business for years, have a head start, but many other stations are also building CNG facilities,” he said.
The NADDC boss cited examples of the cost-effectiveness of CNG, highlighting its potential to significantly reduce operational expenses for businesses.
“For instance, a trip that costs N550,000 with diesel can be done for N90,000 with CNG. This gives users a savings margin of N460,000 per trip.
“ Such savings can translate into lower product costs, which benefits both businesses and consumers,” he explained.
Osanipin also emphasised that more companies were beginning to embrace CNG as a viable alternative.
“Some companies that initially ignored the potential of CNG are now actively investing in it to stay competitive.
“Partnerships are being formed, and infrastructure projects are underway to ensure the availability of gas,” he said.
He assured Nigerians that the government’s efforts to develop the necessary infrastructure would soon reduce gas shortages and enhance CNG accessibility across the country.
“The infrastructure will come, and when it does, the challenges with gas supply will be significantly reduced,” he said.
He also said Nigeria spends approximately $19m annually on the importation of motorcycle spare parts, adding that with the development of the Nnewi Auto Industrial Park, Nigeria will be able to reduce the country’s dependence on imported parts by bolstering local manufacturing.
“Our investigation shows that the value of motorcycle spare parts imported into the country annually is close to $19m.
“This figure excludes tricycles and vehicles. If we can produce these parts locally, we will save a significant amount in foreign exchange and create opportunities for local manufacturers.
“To address the challenge, the NADDC is collaborating with international partners, including the United Nations Industrial Development Organisation (UNIDO) to establish the Nnewi Auto Industrial Park.
“This industrial park is a gigantic investment aimed at supporting small and medium-scale manufacturers who possess technical expertise but lack the financial capacity and modern equipment,” Osanipin said.
He said the park would provide shared facilities, including electricity, security, and modern tools, to enhance production efficiency and reduce operational costs.
“With this initiative, manufacturers will share resources like conference rooms and production facilities. This approach will help increase their capacity, lower production costs, and make scaling up easier,” he added.
Osanipin also revealed ongoing efforts to revive local tire and battery production to reduce the reliance on imports.
“We are working with a local company capable of producing tires for two-wheelers and three-wheelers. Once revived, this company could meet at least 60 per cent of Nigeria’s demand for such tires.
Additionally, we are engaging stakeholders in battery production to further localise component manufacturing,” he said.
The NADDC boss emphasised that localising auto component production was crucial for Nigeria to remain competitive under the African Continental Free Trade Area (AfCFTA).
“If we fail to enhance our local capacity, Nigeria will become a dumping ground for foreign products once the trade barriers among African countries are removed.
To ensure competitiveness, the NADDC has also been focusing on standardisation, capacity building, and fostering collaboration among stakeholders, including manufacturers, customs, and the Ministry of Finance.
“We are aligning efforts to reduce unnecessary costs, such as demurrage, and to simplify processes like obtaining Import Duty Exemption Certificates (IDECs),” he stated.
Osanipin expressed optimism that the establishment of the Nnewi Auto Industrial Park and other initiatives would significantly increase the percentage of locally produced auto components, reduce import dependence, and strengthen Nigeria’s automotive industry.