BY THEODORE OPARA

THE National Automative Council (NAC) has set up a consumer credit fund to assist buyers of made in Nigeria vehicles.

This fund, which is to be enjoyed only by those who buy vehicles from companies that have established assembly plants in the country is one of the moves by NAC to encourage the growth and sustainance of the local auto assembly plants.

The Director General, National Automative Council, Engr. Aminu Jalal who disclosed this recently at a function in Lagos, said that the sum of N2.5 billion has been set aside for the initial take-off of the project.

“NAC has set up a consumer credit fund, with an initial take-off sum of N2.5 billion, to provide soft loan at 10 per cent interest rate for the purchase of made in Nigeria vehicles only,” he said.

“This fund, according to him should be augmented with the N3.8 billion borrowed from NAC for the purchase scheme for the military and para-military personnel and additional N13.67 billion to be sourced from the Central Bank totaling N20 billion.”

Meanwhile, the Director General has recommended to the Federal Government, a concessionary tariff on Fully Built Unit (FBU) import by the local assembly plants suggesting that only local assembly plants should be allowed to import fully built units at prevail tariff level for two years.

This, he said, would encourage investors in local automative assembly/manufacturer and meet expected upsurge in demand due to government pronouncement on patronage and possible public outcry on increased tariffs.

He argued that the automative industry is capital intensive with relatively low return on investment, requiring long term, low interest loans, while on the other hand, it has high socio-economic rate of return in terms of job creation, technology acquisition, wealth creation and as a catalyst for industrialization.

“It is therefore pertinent for government to provide a special intervention fund with a mechanism that will allow easy access to such fund.” This fund is to be accesses by individual automative manufacturers according to merit to be specified by a well-defined criteria. Consequently upon a close examination of industry’s financial challenges, it is recommended that N150 billion be set aside for such purpose.

He suggest that government should fix used imported age limit at eight years and commercial vehicles (trucks and buses) at 10 year. Adding that all used vehicles irrespective of type should be charged 35 per cent duty and 20 per cent levy, as this will also reduce the tendency to declare new vehicles as used, lowering their CIF value and hence the import duty.