The subject experts who spoke with The Guardian said the auto finance scheme, which is a critical component of the Nigerian Automotive Industry Development Plan (NAIDP) that has suffered neglect over a decade, was coming rather too late.
This is just as an analysis by The Guardian indicated that the N20 billion scheme could only purchase 571 vehicles at an average price of N35 million per unit.
A check on some locally manufactured vehicles by Innoson Vehicle Manufacturing (IVM) indicated that prices range between N25 and N35 million depending on the models. Some models on the Innoson line-up cost as much as N100 million per unit.
The scheme, which was launched by the Nigerian Credit Corporation (Credicorp) in partnership with the National Automotive Design and Development Council (NADDC), was designed to make a single-digit loan available for vehicle owners.
The intent was to increase patronage of brand-new vehicles, which has become unaffordable with many Nigerians resorting to used vehicles, which are equally expensive.
For instance, used vehicles bought at N3 million three years ago now cost over N10 million due to the high exchange rate.
Speaking at the official launch/agreement signing between Credicorp and the National Automotive Design and Development Council, NADDC, in Abuja, the Managing Director/CEO of Credicorp, Uzoma Nwagba, explained that the fund aims to eliminate barriers faced by consumers in buying automobiles on credit.
On his part, the Director-General of the NADDC, Joseph Osanipin, stressed the need to improve the demand side of the automobile market to grow the industry.
The Guardian reported that there are 56 indigenous assemblers licensed by the federal government under the 10-year NAIDP launched in 2014 with an installed yearly capacity of over 500,000 units.
Due to low patronage, which would have changed if the NAIDP had been passed into law, only about six of the firms are functional though at an extremely low capacity, while most of the technicians employed have been either converted to after-sales service providers or are out of jobs.
Speaking on the initiative, Deputy Managing Director of CFAO Motors, Kunle Jaiyesinmi, said while the N20-billion scheme was a welcome development as the country is starting from somewhere the amount is paltry and coming too late.
He said this is because most auto assemblers have closed shops, while the few still operating are working at low capacity.
“The scheme is even belated because when the Auto Policy started about 10 years ago, the 35 per cent tariff that’s being charged on Fully Built vehicles, the understanding we had then was that part of it would go to the Auto Financing and the other part would go to Automobile Assemblers’ facility.
“In 10 years, nothing happened, and we know how much has been collected by the federal government from that levy.
“So N20 billion is a paltry amount and the scheme is coming up a bit late. Looking at the local assembling, how many assemblers are we having in Nigeria? For those of us who started eight, or nine years ago, almost all of us have packed shops. So, this is coming a bit late but at least, it’s still better, let’s start from somewhere hoping that people trying to access the loan can have it easily and it can be facilitated very promptly without any bottleneck,” he said.
Former Director of Planning at the NADDC, Luqman Mamudu, said the N20 billion can only fund about 500 vehicles for consumers but said “It is a sufficient commitment to NAIDP launched in 2014.
“As provided for in NAIDP, it is meant as seed fund from NAC (National Automotive Council) levy expected to attract additional funding from others like DFIs and even Nigerian commercial banks and the Consumer Credit Corp itself, who I believe are managers of NADDC automotive purchase window.
“The Nigeria Automotive Programme Act has funding provision to be sourced from the statutory levy on all automotive imports collected over the years by Nigeria customs,” he said.
Automotive Consultant, Dr Oscar Odiboh, stated that the introduction of Creditcorp represented an improvement in the automotive sector, saying: “There is more funding in terms of the pooling of resources, funds that can create more competition, make people less restive when it comes to auto ownership.” (Guardian)
