ByEugene Nweke
Our attention has been drawn to a rejoinder (paid publication) by the National Automotive Council – NAC on page 66 of The Guardian on Wednesday July, 9th 2014, signed by its Director General, Eng. Aminu Jalal.
It is pertinent to note that all the efforts made to convince Nigerians on the critical economic Implication of the policy on an average Nigerian, in all emphasis expressed in the said publication remain a statistical propaganda, not rooted in any empirical statistics.
Rather it was characterized by propaganda phrases such as: ” would be put in place” which is synominous with the popular deceitful anticipatory phrase of ” it is in the pipe-line”, indirectly implying that there is nothing on ground to support and drive this policy other than the similar propounded statistics which trailed the failed: “Cargo Tracking Note Policy “- that ended up making more profit to the consultants coffers than the Nation, before its suspension, but not before it had exploited and inflicted hardship on the masses, especially the Nigerian Shippers.
Another like it is the Cement Importation Ban” – before the ban, a bag of Cement was sold in the open Market for #800:00 as against #2300:00 under the import ban regime, adding to the cost of building materials and cost of living.
The Director General indeed proffered that, “vehicles unlike rice would be jointly Impounded at the point of registration if payable duties were discovered unpaid at the import entry point”. The Director General failed to understand that where such vehicles are impounded and subsequently abandoned by the original owner, over time, the ultimate alternative will be the disposal through by auctioning by the government. Or will NAC recycle or melt such vehicles as exportable raw materials?
To buttress the fear that, the policy seems to be elite driven, we have seen the subtly conferment of dual import status to the so called Auto Assemblers, when it noted that, the “Assembly Plants would import Fully Built Units of Vehicles (FBU) at 35% duty for cars and 20% duty for commercial vehicles in number twice the number of CKD or SKD they assembled for the first two years of the programme at the import duty rate 0% to 5%”. In this regard, there is no guarantee of administrative control as compromises and corrupt practices are likely to take a center stage.
It is on this premise of gross uncertainties that we posit the following “Food For Thought”:
“In an evaluation issued in 2007, the World Bank in its assistance efforts to the Agriculture 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 endless economic crises in most African Countries till date.”
“In most reforming countries, the private sectors did not step in to fill the vacuum when the public sector withdrew. World Bank admitted that NGO’s have even been 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 a 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, profit driven investor most times prefer to do their business in a compromise inducing countries, in a sector with structural incentives for corruption and they have vast feet that alter political, economic and environmental destinies”.
To summarize the above, while considering its realities in our present day economic policy formulations, the proverbal sayings, that: “All that glitters are not gold” and” look before you leap” quickly come to mind.
In view of the above Food For Thought, I have watched since the beginning of the Year 2014, with rapt attention, the political intrigues, group agitations and administrative manipulations trailing the introduction of this 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, hence, the public outcry.
Suffice to note with regret, the observed heightened vested interest of some critical stakeholders (scheming for the utilization and exploitation of this government gesture /largesse otherwise known as import waiver or concession which most of them have enjoyed 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 of “scrambling and partitioning of the Nigerian Treasury or common wealth”.
Taking a cue from the immediate past policy summersault that greeted the Rice import policy, packaged and statistically propounded by the Agriculture 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 is protected. The Policy only created window for hyphen smuggling activities within our international frontier or border stations.
With unaddressed issues surrounding the implementation of the much controversial Auto policy, without repeating the issues of Job Losses to our people and revenue loss to Nigeria to the advantage of our neighboring Countries inherent, as was raised in some quarters, from a sound perspective point of view, the Auto Policy falls short of critical consideration, ranging from:
a) Policy not having a legislative backing and as such is prone to policy inconsistency, possible jettison/abandonment by the successive administrations.
b) Power supply that will add the needed impetus to accelerate cheaper and reasonable assembling and production costs still in epileptic condition if not in a near state of 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 companies have 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 sub-sector is also in a stagnant state.
f) Foreign exchange rates fluctuate daily almost uncontrollable.
g) There is no existing clearly defined road map towards the implementation of the Policy, tailored in graduating phases.
h) With regards to the principle of demand and supply , the Consuming Public is yet to be provided with an alternative before placing a seemingly or indirect ban on second-hand vehicles, as the so called Assembly Plants 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 of the masses interest
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, shows 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 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.
Then Vice President Goodluck Jonathan publicly acknowledged the realities of the performance of economic reform on May 12, 2008. In his word: “it is important to emphasise 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 cannot over flog the issue of infrastructure deficit that continues to becloud our investment climate”. It is true that our President is a man of the people, but will the auto policy, with its prevailing approach serve as a tool to addressing this highlighted national challenge? Time will tell.
The irreconcilable questions here will be; which Population census or indices or parameters or measures, data and ratio did the Government deploy to arrive at its policy formulation to the extent of reasoning that Nigerians have no need to buy cars with money rather it will flag off a collaborative credit products with the bank so that Nigerians can own 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 Nigerian 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 lost 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 in 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 the United Nations Development Program (UNDP) Nigeria ranks low in terms of the Human Development index – a composite measure of life expectancy, income and educational attainment, occupying number 158 behind Haiti and Congo”. Again, the Honorable Minister for Finance is better placed to 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 on 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 percentage of the National Population represents the self employed Nigerians? What is our present earning per capital 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 money and have bank accounts? 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 lip served. Does our government have what it takes to regulate the investors or is it the usual political phrase of: “amala politics” stuff?
Policy such as the new Auto Policies 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 desire of those that are closer to political administration at their convenience alone.
Government should tell Nigerians why the following auto plants, namely: Volkswagen, Peugeot, Steyr, Mercedes, Land Rover, etc failed under the 1973 auto policy, in spite of the import duty waiver and concession deployed into the project and notwithstanding the level of Government patronage to the plants and the low patronage by Nigerians, then. Mention also should be made of; what was their employment and production capacity then?
In comparison to the massive import duty waiver and concessions granted to both Assembly Plants and the car dealers, then, What is the economic contribution of Car dealers especially and the Plants 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 these auto plants and dealers then?
Furthermore, is this an Auto policy mass 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 prefer that ‘Nigerian’ 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 products to our country or not to ship it at all. As a result the government intensifies lobby for foreign business partnership under the guise 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 regard serious efforts must be geared 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 governed and respect for their feelings, when undertaking a closed door decision.
Auto policy formulation must not be seen in the light of the above. It is one of those policies 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 parliamentary scrutiny and 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.
Finally, Nigerians will want to know the critical roles of the National Automotive Council towards the technological advancement of our economy, over the years, in relation to the judicious application and usage of the 2% levied on imported vehicles and spare parts for the purpose of auto industry development in the country, which the Nigeria Customs has been collecting on behalf of the council for over the period of 12 years before former President Olusegun Obasanjo, saw it as undue levy imposition against the Nigerian importers of vehicles and spare parts and officially cancelled its collection in his second term (2003 – 2007).
The probity of the end utilization and usages has become highly necessary in
determining the sincerity of purpose in its pursuit and propagation of the present policy.
References
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, Road GRA Apapa, Lagos, Nigeria.
Cell. 08136242266,08023630299.
