Auto Policy: A food for thought


By  Dr. Eugene Nweke

” In an evaluation issued in 2007, the World Bank in its assistance efforts to the Agricultural development in Sub Africa, for the first time admitted that it should not have advised African governments to withdraw support from their farming sectors in 1980’s  and 1990’s. World Bank wrongly expected that the private sectors would provide necessary support; when that didn’t happen, farmers were devastated, marking the beginning of an  endless economic crises in most  African Countries till date.. .”

 ” In most reforming countries, the private sector did not step in to fill the vacuum when the public sector withdrew. World Bank admitted that Non-Governmental Organizations (NGOs) have been  even  more critical. In a 2003 study on Poverty Reduction or Poverty Exacerbation for the World Bank Group Support for Extractive Industries in Africa, it produced little evidence to show that extractive operations have contributed to poverty alleviation in sub-Sahara Africa”.

 ” In country like Nigeria, closed door negotiations for extraction licenses and investment permits ( concession) are considered mostly by royalty officials, who votes on royalty rates which turn into matchmaking opportunities for bribe givers and bribe takers”.

 ” Recalling that, the social responsibility of every business is to increase its profits, a profit driven investors most times prefer to do their business in a compromise inducing countries, in a sector with structural incentives for corruption and they have vast foot that alter political, economic and environmental destinies”.

To summarize the above, while considering its realities in our present day economic policy formulations,  the proverbial sayings, that: ” All that glitters are not gold” and ” look before you reap” quickly comes to mind.

In view of the above food for thoughts,  I have been watching since the beginning of the Year 2014,  with rapt attention, the political intrigues, group agitations and administrative manipulation trailing the introduction of these critical National Policy, which thus, seems to have been reduced to a mere administrative policy, not minding the quantum socio – economic implication on the general well being of an average Nigerian.

 Suffice to  note with nostalgia,  the observed heightened vested interest of some critical stakeholders ( scheming for the  utilization and exploitation of government gesture /largesse other wise known as import waiver or concession which they have benefited over the years at the detriment of the Masses)  and the representatives of the Government ( their allies)  manifesting out and dramatized in an old fashion  “scrambling and partitioning of the Nigerian Treasury or common wealth”.

Taking a cue from the immediate past policy somersault that greeted the Rice import policy, packaged and statistically propounded by the Agricultural Minister,  Dr Adewunmi Adesina, who convinced our Federal Executive Council into endorsing the policy, even against the backdrop that the Honorable Minister failed to put in place an effective and sustainable policy preservation components, namely: the National Commodity Storage Board and the National Commodity Price Control Board, upon which the farmers interest are protected. The Policy only created window for hyphen smuggling activities within our international frontier of border stations.

With unaddressed issues surrounding the implementation of the much controversial Auto policy, without repeating the Job Loss and revenues Loss to our neighboring Countries inherent, as was raised in some quarters, from a sound perspective point of view, the Auto Policy fall short of critical consideration,  ranging from:

(a) Policy not having a legal backing from the legislature and as such is prone to policy inconsistency, possible  jettison/abandonment by the successive administration.

( b). Power supply that will add the needed impetus to accelerate cheaper and reasonable assembling and production cost still in epileptic condition if not in a near state of a comatose.

(c). Statistical validation of Factors that led to the poor performance of the 1973 auto policy are still there unaddressed., e,g. PAN – Kaduna, Range Rover-Ibadan, Volkswagen Lagos, Styre Motors- Bauchi, Anamco Mercedes- Enugu etc, are all noted to have performed below their respective expected capacity.

(d). The service sector has not been convincingly developed, presently Michelin Tyre, Dunlop Tyre, and most of the service parts manufacturing company has since winded up business in Nigeria, while some have closed down on account of epileptic  power supply and policy inconsistency. Presently, some of them have relocated to Ghana.

( e). The steel rolling and melting sector is also in a stagnant state of non even operations.

( f) Foreign exchange rates  fluctuates almost uncontrollable.

(g). There is no existing clearly defined road map towards the implementation of the Policy, tailored in is graduating phases.

(h). With regards to the principle of demand and supply , the Consuming Public are yet to be provided with an alternative before placing a seemingly  or indirect ban on second handed vehicle, as the so called Assemblers are yet to assemble enough to match the market demand.

(I). The policy was not based on any empirical population census statistics to justify its drives
and propagation, thereby lacking in even representations.

 Looking at the impending hardship this policy is likely to inflict on the suffering Masses, it is pertinent to reiterate that ” the concentration of Nigeria’s vast oil wealth in the hands of a small group of wealthy

Nigerians has made income distribution among the most unequal in the world, it has been noted that at least, less than 200 Nigerians are U.S dollar billionaires”.

In addition to this, ‘the remarkable statistic has been the dearth of the middle class in our society, dating from the collapse of the last oil boom in 1980’s. It has largely been replaced by the so called respectable poor, educated, white collar Nigerians without the means to maintain a “middle class” standard of living”.

 ” Poverty is so pervasive in the country, to the extent that the report from the Nigeria Living Standard Survey (NLSS) in 2004, showed that they lowered their metric for poverty ( poverty line) to per capital income of twenty six thousand Naira, approximately two hundred U.S dollar ($200) per day for measuring poverty in the developing world. Over 54.2%  of the population lived below the revised poverty line. 90% of the population would likely have been counted as poor”.

 “A world Bank income statistics shows a similar story: Nigeria’s gross domestic product (GDP) per capital not only is much lower than the average in sub Saharan Africa but also has decreased substantially below what it was in 1970.”

UNESCO noted on its poverty report in Nigeria quoted in Daily Champion of , January 27, 2010, that, 92% of the population was living on less than two dollars ($2) a day, 71% was living on less than one dollar $1. a day or the Finance Minister should come up with a realistic figure.

 “Recall that, at a diplomatic dinner in 2004, the Finance Minister under the former  President, Chief Olusegun Obasanjo, made a spirited defense of Obasanjo’s trade bans and other retrograde trade and investment policies even though they ran counter to the spirit of her own reform efforts..” In all of these, there was no particular mention of the real negative impact of the policy to the masses.

The then Vice President Good Luck Jonathan publicly acknowledged the realities of the performance of  economic reform in May 12, 2008, in his word, ” it is important to emphasis that the performance of the Nigerian economy in the past four or more years has been remarkable, with a stable macro- economic environment and growth rate averaging 6.3 % …. However, it is obvious that the associated benefits of growth were yet to trickle down to a large segment of our people… The challenges  of poverty, growing inequality, coupled with increasing graduate unemployment remain worrisome…we can not over flog the issues of infrastructure deficit that continue to becloud our investment climate”. Truism of our President as a man of the people, but is the auto policy , with its prevailing approach serves as a tool to addressing this highlighted national challenge? Time will tell.

The irreconcilable questions here will be;  with what Population census or indices or at what point or  parameters or what measures, data and ratio did the Government deployed to arrives at it policy formulation to the extent of reasoning that Nigerians has no need to buy cars with money rather it will flag off a collaborative credit products with the bank so that Nigerians can owe cars of their choice and pay back over a stipulated time on installment basis?

Stretching it further,  according to former World Bank President Paul Wolfowitz, “at least $100 billion of the $600 billion in oil revenue accrued since 1960 have simply ‘gone missing’. Former Nigeria anti corruption czar Nuhu Ribadu claimed that in 2003, 70% of the Country’s oil wealth was stolen or wasted; by 2005 it was only 40%. By most conservative estimates, almost $130billion was lot in Capital Flight between 1970 and 1996″.

“Over the period 1965 – 2004, the per capital income fell from $250 to $212 while income distribution deteriorated  markedly. Between 1970 and 2000 the number of people subsisting on less than one dollar a day on Nigeria grew from 36% to more than 70%, from 19 Million to a staggering 90 million” .

 “Over the last decade GDP in Purchasing Power Parity (PPP) terms fell 40% from $1,215 in 1980 to $706 in 2000. Income poverty rose from 28.1 % to 65.5%  and other indicators  of welfare – notably access to education and health also declined. According to United Nation Development program, Nigeria ranks in terms of the Human Development index – a composite measure of life expectancy, income and educational attainment, scoring number 158 below Haiti and Congo”. Again, the Honorable Minster for Finance should counter and present a realistic and verifiable statistics to represent the above.

 “Nigerian populace are at a cross road, contemplating if they will be alive to enjoy the dividend of transformation policy thrust and not in their dying state of starvation”.

The Question in the lips of the Masses remains: What is our present true Population census Figure ? What is the Population figure for the unemployed? What is our National Work force? What figure of the National Population represent the self employed Nigerians?  What is our present earning per income?  To what percentage, is our welfare and feelings considered in this policy formulation? What is the employing capacity of the investors managing our public enterprises?  Are we really carried along in this policy formulation viz-a- viz what population figure of the masses can comfortably boast of earning and saving money in the bank? At any case, what population figure actually maintains  a savings account with the bank? Have the government tackled Corruption headlong or is it a mere statement? Do our government have what it takes to regulate the investors or is it the usual political phrase of: “amala politics”  stuff?

Policy such as Auto which serves as a tool for convenient movement from one point to the other, must be nurtured and birthed with consideration to the national census figure and with serious survey and empirical research, and not one borne out of selfish propagation of those that are closer to political administration at their convenience, alone.

Government should tell Nigerians, Why the following auto plants, namely: Volkswagen, Peugeot, Styre, Mercedes, Land Rover, etc failed under the 1973 auto policy, in spite of the import duty waiver and concession deployed into the project and not withstanding the level of Government patronage to the plants and the low patronage by Nigerians, then. Mention also should be of; What was their employment and production capacity then?

 In comparison to the massive import duty waiver and concessions granted to both assemblers and the car dealers, then, What is the economic contribution of Car dealers especially and the assemblers  to the growth of our economy and what is their employment capacity, in relation to our gross domestic product growth then?. How many Nigerians actually patronized this auto plants and dealers then?.

Furthermore, is this Auto policy masses driven or middle class driven or private sector or elite driven alone. This again can be viewed for better understanding from Peter Maas, report,  “Ideally, the government will prefers that ‘Nigerians’ Companies be the ones that create job and profits for ‘Nigeria’ itself and lower the pulse rate of national security officials who worry about cutoffs by foreign companies /investors that might be persuaded for economic or political reasons, to ship their product to our country or not to ship it at all. As a result the government lobbies intensively for foreign business partnership under the disguise of undigested and non properly evaluated  Foreign Direct Investment- (FDI) venture”.

“ Instructively, it is important to reinstate that, if investment drives, are purely based on profit motives, it leads to unethical behaviors, mostly so in a foreign firm dominated private sector economic activities and environment. In this regards serious efforts must be concerted towards ensuring that both national and Foreign investors do not only shun bribery but that they genuinely care about the Communities and States they operate in”. Stressing need to protect the interest of the citizens and not a citizen Interest alone.

 It is also worthy to note that, ” It may be true that, government tasks are accomplished behind the scenes and prepare itself against any opposing voice, however, it is worthy to note that, a new National order can only emerge where the governed are valued and the rule of law supplants the rule of the Jungle”. Here again, emphasizing the need to place value on the govern and respect to their feelings, when undertaking a close door decision.

Auto policy formulation must not be seen in the light of the above, it is one of those policy that must not be reduced or seen to serve the business interest of few Nigerians at the detriment of the larger number. Indeed it will be regarded by Nigerians as a wise decision on the part of the Federal Executive Council, to allow and subject this Auto policy to receive a parliamentarian endorsement, so as to accommodate all shades of interests, thereby giving the policy a national coloration.  Secondly, it’s for the sustainability of the policy beyond a particular political administration policy thrust.

Nigeria Dancing on the Brink- by John Campbell. Pg 12,13,18,20.

CRUDE WORLD- by Peter Maass. Closing notes.
Fwdr,Chief (Dr) Eugene Nweke ,Rff ,Mpta,Mnis,Fffa,Mccc.
National President, NAGAFF.
CEO, Virtues Marine and Freight Services Ltd.
Gbobaniyi of Ilogbo Eremi Kingdom.
2a Maybin  St Apapa, Lagos,Nigeria .
Cell. 08136242266,08023630299.


Leave A Reply