Mr Jelani Aliyu, Director-General, National Automotive Design and Development Council (NADDC), on Thursday applauded the Federal Government over moves to ensure the completion of Ajaokuta Steel Rolling Mill.
Aliyu made the commendation at the annual conference of Commerce and Industry Correspondents Association of Nigeria (CICAN), in Abuja.
President Muhammadu Buhari and his Russian counterpart Vladimir Putin, on Wednesday agreed to put Nigeria-Russia relations on a fast track to ensure the completion of partially completed and abandoned projects initiated by both countries.
Buhari’s request for the return of Russia on a government-to-government relationship for completion and commissioning of Ajaokuta Steel Rolling Mill was accepted by Putin.
The agreement was reached at a bilateral meeting held in Sochi on the sidelines of the ongoing Russia-Africa Summit.
Aliyu said that if revived, the steel rolling mill would help to revive the automotive industry by encouraging local production of vehicles.
“Majority of the vehicles have steel body, so it will help in their production locally,’’ Aliyu said.
He also noted that completing the mill would encourage increased private sector involvement in car production.
“It is therefore, imperative to leverage on the moves by the Federal Government to produce cars at cheaper cost,’’ Aliyu said.
While identifying that the automotive sector had a critical role to lift Nigeria out of poverty, Aliyu said that 4,782 persons were currently employed in the sector.
“This means that 40,000 to 50,000 people are indirectly employed,” he added.
According to him however, it is worrisome that Nigeria spends eight billion dollars annually for the importation of about 400,000 vehicles.
“Unfortunately some of them are very old cars. In the 1970s and the 1980s, we had brands like Peugeot and Volkswagen and we produced between 40,000 to 100,000 cars annually.
“The drop in crude oil price from 27 dollars to 10 dollars affected the automotive industry, forcing many car manufacturing companies to shut down and leave the country,’’ Aliyu said.
He said that NADDC was pushing for a 10-year tax holiday to encourage the production of new vehicles in the country.
According to him, the production of new cars will attract 30 per cent discount while assembling will offer 10 per cent discount.
“Already NADDC has signed a Memorandum of Understanding with Volkswagen to establish its plant in Nigeria; and excitingly Peugeot just manufactured its Pick-up so many years after its last production.
“We are working out modalities to ensure that what Volkswagen wants is put in place, and as soon as we give them the conducive environment, they will set up a high capacity industry,’’ Aliyu said.
He added that the council would soon launch an application that would register all the vehicles manufactured in the country.
“This will discourage smuggling; so, when you go to smuggle a car into the country and want to register it, it will reflect that it is smuggled,’’ Aliyu said.