The Federal Government through the Vice President, Prof. Yemi Osinbajo has said the government is mapping out a policy that will mandate all ministries, departments and government agencies to buy made in Nigeria cars.
The nation’s number two man said this during the 26th Nigerian Economic Summit organised by the Nigerian Economic Summit Group (NESG).
Osinbajo, noted that the order will boost local manufacturers and help reduce car import levy proposed in the draft 2020 finance bill.
“The point of reducing duties and levies on motor vehicles is to reduce the cost of transportation by reducing the cost of vehicles.
“The subsequent removal of fuel subsidies and an increase in fuel price has had a pass-through effect on food prices, transportation costs and so on.
“Now, the automobile policy is directed at localised production of vehicles so the logic then was that if you increase duties and levies on imported cars and imported vehicles, local production becomes more competitive and this is a compelling argument.
“However, the annual demand for vehicles is about 720,000 vehicles per year but actual production today by the assembly plants that we have is 14,000 vehicles a year.
“So the problem is that at the current rate of production, we will not meet the serious national needs and this will just mean higher prices of vehicles and greater strain on other sectors of the economy that depend on transportation.
“But we are not giving up on the auto industry.
“Two important things to note; the first is that we still have relatively high duty 35 percent so there is still a disincentive for importation.
“Second is that we are promoting policy that the government must buy only locally manufactured cars”.