Auto Industry crucial to Nigeria’s economic development

In line with the President Bola Tinubu’s Economic Agenda, the Nigeria Auto Manufacturers Association (NAMA) has said that the nation’s automotive industry holds significant potential to contribute to Nigeria’s economic development. This is just as the association has outlined strategies to reposition the industry for growth.

In his presentation at the maiden edition of the Nigeria Auto Industry Summit (NAISU), held in Lagos recently, council member of NAMA, Ben Ejindu, harped on the critical roles of the automotive industry to Nigeria’s economy.

In the summit organised by the Nigeria Auto Journalists Association (NAJA) in conjunction with the National Automotive Design and Development Council (NADDC), Ejindu explained that with strategic focus on employment generation, Gross Domestic Product (GDP) contribution, economic linkages, SME support, skills development, technology innovation, and industrialisation, the sector is poised to drive Nigeria’s economic progress.

Noting that the auto industry is a critical driver of employment in Nigeria, he averred that by establishing and expanding Completely Knocked Down (CKD) and Semi Knocked Down (SKD) assembly plants, the sector can generate substantial job opportunities.

He added that the availability of a large and trainable workforce further supports this potential, creating a robust foundation for economic growth.

The automotive expert stated that the auto industry contributes significantly to Nigeria’s GDP through manufacturing and assembly activities.

According to him, the current statistics of $210 million and 0.04 per cent to the country’s GDP provided by NAMA illustrates the sector’s economic impact with a huge potential to grow.

He said strategic investments in the industry can enhance its GDP contribution, fostering economic stability and growth.

Ejindu emphasised that the auto industry creates numerous opportunities for SMEs growth through the production of automotive components and parts.

“Reviving local manufacturing of tyres, batteries, glass, and other components can stimulate SME growth, leading to job creation and economic diversification,” he said.

He explained that investment in skills development and technology innovation is essential for the auto industry’s growth.

He said: “Training programmes and partnerships with educational institutions can equip the workforce with the necessary skills to thrive in a competitive market.

“Embracing technological advancements will enhance production efficiency and product quality.

“The auto industry plays a vital role in Nigeria’s industrialisation efforts. Attracting foreign direct investment (FDI) from key auto brands such as Hyundai, Geely, and Yutong can bolster the sector’s development.

“These investments bring advanced technologies and best practices, driving industrial growth and economic progress.

“Nigeria is endowed with abundant raw materials essential for automotive manufacturing.

“Leveraging these resources can reduce reliance on imports, conserving foreign exchange and promoting local production.

“Developing a comprehensive automotive raw materials development and component manufacturing master plan is crucial for maximising these benefits,” he said.

He also noted that Nigeria’s strategic position allows the auto industry to tap into regional export potentials within West Africa and the AfCFTA.

“With a potential market size of 1,150,000 vehicles per annum, the industry can cater to domestic demand while exploring export opportunities, boosting economic growth,” he stated.

He stressed that to unlock the full potential of Nigeria’s auto industry, several policy interventions and strategic initiatives are necessary, including Implementing the Nigeria Automotive Industry Development Plan (NAIDP).

“Fine-tuning it will provide a regulatory framework to support the industry’s growth; establishing a master plan for automotive raw materials development and component manufacturing will guide the sector’s strategic growth.

“Aggressively incentivising CKD assembly through contract manufacturing can leverage economies of scale and attract investments, reviving tyre, battery, and glass manufacturing as a precursor to revamping local production of various automotive components, and fostering SME growth,” he added as further interventions.

According to him, with the right policies and strategic initiatives, Nigeria’s auto industry is poised to become a cornerstone of the nation’s economic development.