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Govt moves to halt auto parts’ importation

News » Business

Image: Used Auto Parts


April 6 2012


THE Federal Government has unfolded plans to stop importation of automotive parts into the country, under its local content promotion initiative, to bolster operations of local sector operators.

The development is coming on the heels of re-emergency of automobile assembly plants, which currently rely mainly on imported components for their respective operations

For effect, the government, yesterday, unveiled an investment package for Small and Medium Enterprises (SMEs) to boost local production of automotive parts and components.

At an automotive business forum in Abuja, the government has also made provision for additional funding for such ventures available at the Bank of Industry (BOI) and the National Economic Reconstruction Fund (NERFUND). Agencies like the National Agency for Science and Engineering Infrastructure (NASENI) would be on hand to pledge technical expertise for SMEs wishing to venture into local production of auto components.

The investment profiles on auto components covers 58 areas, such as motorcycle head light assembly; motor vehicle headlight; rear light and trafficator light; automotive rubber bushings and pedal pads; automotive fuel and air filters; motorcycle crank pedal; motor vehicle door locks and handles; leaf springs; fabricated structural bicycle components; motor vehicle horns and ignition coils; motor vehicle window winding mechanisms; and motor vehicle window winding mechanisms.

The Minister of State in the Ministry of Trade and Investment, Samuel Ortom, stressed the abundance of investment opportunities in the nation’s automotive industry.

He said: “ The importance of the automotive industry to the national economy cannot be over-emphasised. It is a vital industry in a developing economy like Nigeria. One of the major benefits accruing from the automotive industry is large employment generation, particularly when automotive components and parts manufacturing are fully developed.

“It should therefore be viewed as one of the corner stones for establishing a self-sustaining economy, job creation and upgrading the standard of living of Nigerians. The automotive industry gives an opportunity to diversify into sophisticated, technically demanding activities that supports higher rates of economic growth.

“The Nigerian automotive industry is about five decades old. The local automotive assembly plants, except in a few cases, are not supported by parts and components from local manufacturers. IT has therefore become imperative to woo interested investors to take-up the challenge of providing parts and components to the assembly plants.”

Director-General of the National Automotive Council, Aminu Jalal stressed that the automotive industry sources about 70 per cent of the over 2000 parts and components that make-up a typical car from small and medium enterprises and stressed the need to take advantage of such opportunities to create wealth and jobs for Nigerians.

He added: “Beside, supplying the assembly plants, many automotive parts and components are also needed for vehicles service, repair and maintenance.

Currently, most of these parts are imported, constituting a drain on the foreign exchange reserves and creating job overseas instead of locally. There are many reasons for this sorry state of affairs. One of them is lack of knowledge of the investment opportunities in the sector. The National Automotive Council, therefore, developed project profiles for 58 automotive parts/ components to facilitate investment in the sector.”

In a presentation at the event, the Acting Director General of NASENI, Mohammed Haruna, stressed that his agency was ready to work with NAC to target at least 10 entrepreneurs in each of the six geopolitical zones of Nigeria and identify and select 120 technical hands for training on local fabrication of auto parts in Nigeria.

He said: “We have the capacity and would immediately work with NAC to train young engineers or technologists interested in joint venture entrepreneurship; organize three months hands-on practical training for each group in their areas of business interest locally or in one of the industrialized nations; facilitate accessibility of existing investment fund to successful participants; facilitate accessibility of entrepreneurs to utilize existing government industrial and technological infrastructures; develop entrepreneurship mentoring programme for all beneficiaries of such fund.”

He stressed his agency could also work with stakeholders to organize nationwide entrepreneurship development programmes in the following areas: foundry, forging, machining, metal fabrication, electrical and automation, auto electrical, plastic moulding,, tool making, project management and implementation, quality assurance, and computer aided design and manufacturing.

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