Moses Akaigwe
As stakeholders continue to lament the effect of the faltering implementation of the auto policy on their industry, one of the biggest investors, Dr. Cosmas Maduka, has declared that he regretted investing more than $50 million {about N1. 7b} in setting up an assembly plant in Lagos.
He, however, restated his belief in the policy encapsulated in the Nigeria Automotive Industry Development Plan {NAIDP} which, he said, was necessary for a viable local auto manufacturing sector. The problem, he argued, is in the lukewarm implementation by government.
Maduka, who is the President of the Coscharis Group, was assessing the NAIDP which took effect about five years ago {precisely on July 1, 2014} and the delay by the Presidency in assenting to the Fiscal Incentive and Guarantees Bill that would have given it a legal framework.
He said in an exclusive interview that the projections of growth made by Coscahris Motors and other auto makers who responded to the policy by building assembly plants – some in collaboration with auto manufacturers from different parts of the world, have been shattered by lack of progress and uncertainties in the industry.
Built on a 14-hectare piece of land in Awoyaya area of Lekki-Epe expressway, Lagos, in partnership with Ford Motor Company, the plant was inaugurated in October, 2017, with an installed capacity for 60 units of vehicles a day, starting with the Ranger pick-up.
But, the Coscahrsi President lamented in Lagos last week that the hope of recouping the huge funding in 10 years based on the initial projection of selling 10, 000 vehicles annually, is far from being alive, because total yearly sales figure has been far below 2,000 cars.
“Of course, I regret the investment! Why would I not regret the investment? From the benefit of hindsight today, you think it is something that is waste, but at the same time, it is also premature to take a conclusive decision, because till today, the Federal Government is still hesitant. They {government} have not said a definite ‘yes’ or ‘no’ to the auto policy.”
Maduka was among the auto dealers who vehemently opposed the NAIDP when the idea was first made public, “because I did not believe that the government had the will to see it through; not that I thought it could not work, but I doubted their will to see it through. Whether anybody likes it or not, all my prophesies have now come to pass.
“In all honesty, I think that if the Goodluck Jonathan administration {that announced the policy in October, 2013} had continued in power, they would have retained Olusegun Aganga {the then Minister of Industry, Trade and Investment}, because they had the will to make it happen. “They understood what it takes to implement an auto policy and they would have seen it through. They had already started forcing government to buy made-In-Nigeria vehicles, putting things in place for the workability of the policy and providing the incentives. They had the will to make the industry viable.
“Let’s be very honest; as a country of about 200 million people, and going by the World Bank projection, by 2050, we will be 450 to 500 million people, we need to have our own viable auto industry. Renault exports over 300, 000 cars annually from its auto plant in Morocco. Auto makers in South Africa export vehicles to the USA, Japan, Australia, and UK, and the brands include BMW and Mercedes. It has been proven that the vehicles made in South Africa are far more superior to the ones they made in America. They won J.D. Power awards for five consecutive years.
“So, it is not that we lack the capacity, but there is lack of will on the government side to make it happen. We have the market, but the unfortunate thing is that you cannot fix a problem that you don’t understand. The problem is in the diagnosis of the problem… The President has refused to sign the auto policy bill, but the automotive investors in Nigeria still carry on with their programmes. And that is why people like me have said that government is not good in doing business.”
The Coscharis Prsident appealed to the government to urgently give legal strength to the policy implementation by assenting to the Nigeria Automotive Industry Development Plan {NAIDP} Fiscal Incentive and Guarantees Bill.
He argued that the refusal to sign the bill was sending a negative signal to those who were encouraged by the new idea to invest in the auto industry. It also, confirms, according to him, the fears of potential investors, especially OEMs [original equipment manufacturers], who feel that the country has a reputation for policy summersault, and have therefore, been maintaining a let’s-wait-and-see stance.
“The real business people want a definite ‘yes’ or ‘no’, so that they can work with whatever you want to do. We are in a dilemma and hesitant in making decisions. We would have been happier if they had said ‘no’, so we can move on with our lives. Frankly, we (Coscharis) won’t be the worst hit if they say ‘no.’ But if am asked to make a choice, I will say that auto policy is good for our country. But, it demands sacrifices initially and we have to go through labour before we enjoy the benefits.”
The NAIDP aims, among other objectives, to discourage the importation of completely built vehicles and encourage the local manufacturing of vehicles through Complete Knocked Down (CKD) assembly {or Semi Knocked Down, SKD, facilities for a start.