BoI Pledges More Investment as Vehicle Importation Dips by 20%

BoI Pledges More Investment as Vehicle Importation Dips by 20%

03 Dec 2014

Managing Director of BoI, Mr. Rasheed Adejare Olaoluwa

Crusoe Osagie 

The nation's industrial development finance institution, Bank of Industry (BoI), has stated that it is fully convinced about the feasibility of automobile manufacturing in Nigeria and is ready to inject more funds to boost the industry.

The bank said it was impressed with Nigeria's determination to join the league of industrialised  nations like Germany, Britain, United States, China, Japan with the unveiling of the first ever truly made-in-Nigeria cars by the Innoson Vehicle Manufacturing (IVM) Company Ltd, in Nnewi, Anambra State.

The Managing Director of BoI, Mr. Rasheed Adejare Olaoluwa, said having seen the progress made by the Innoson Group in automobile manufacturing, "we are prepared to work with other serious-minded automobile manufacturers and provide financing opportunities which they can take advantage of".

Unveiling the IVM Fox hatchback and the IVM Umu saloon cars at Innoson’s Plant in Nnewi, the Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, noted that the recent Auto Policy of the federal government, which he said had dramatically reduced the volume of imported cars by 20 per cent since its introduction, made the feat possible.

“This is another milestone under President Goodluck Ebele Jonathan who insisted on positioning industrialisation and value addition at the forefront of his administration’s developmental policies and I commend Innoson for making significant investments to show that he supports our industrial policies,” he said.

He pointed out that President Jonathan had implemented policies that would diversify the country’s economy and sources of government revenue, given the fact that Nigeria has the raw materials to support industrialisation and so far the policies are yielding the desired results.
Commenting on the local content analysis done on the IVM brand vehicles by the Nigerian Society of Engineers (NSE), which disclosed that the vehicles were made up of about 70 per cent locally-sourced contents, the minister pointed out that there was no country in the world that could boast of 100 per cent local content.

“Some OEMs do only 30 per cent but today we are all here making history in Nnewi, the Japan of Africa, where we have successfully produced 70 per cent local component cars which is one of the highest and when you talk about affordability, Innoson is the cheapest,” he said.
Aganga added that other global brands like Nissan and Peugeot were driving partnerships and capacity expansion in the country’s auto sector.

“As we talk of the fall of oil price, it has become critical that we cannot continue to import what we can produce here in Nigeria. We spend about $6 billion annually importing cars. However since the introduction of this policy, we have experienced a 20 per cent drop in imported cars and have exceeded expectations in a very short period,” he said.

According to Aganga, those who initially opposed the Auto Policy have decided to go into production.

“Without the political will of the president, we would have had a policy reversal with the amount of pressure that was mounted on us to drop it and we would not have been here unveiling these today,” he said.

He commended Innocent Chukwuma, the Chief Executive Officer of the Innoson Vehicle Manufacturing Company Ltd, for possessing a can-do spirit, which has propelled the company to dizzying heights of industrial success.

“Our industries deserve infrastructural and financial support to reach their objectives and for Innoson those two critical support components came from the administration of the former Governor of Anambra State, Peter Obi and the Bank of Industry (BoI),” he said.

Aganga pledged federal government’s continued patronage of locally manufactured products, stressing that in passing the Auto Policy it was established that government would only buy made-in-Nigeria cars and provide the needed support for industries to excel and compete globally.

“We plan to open three auto component cluster parks in the countryand we need the governor of Anambra State (Willie Obiano) to sign an MoU and give us a piece of land and the C of O here in Nnewi and we would establish one of the three cluster parks here,” he said.

Making his remarks, Olaoluwa expressed the delight of the development bank in witnessing the historic event.

“In Nigeria today, there are many companies that are into the assembly of cars but today for the first time, we are actually manufacturing cars. The Nigerian Industrial Revolution Plan (NIRP) is beginning to bear fruits in the key areas of competitive and comparative advantages, where we can drive growth and development in the economy," Olaoluwa said.

He noted that Innoson is an exemplary customer of the bank, adding that this was the beginning of more good things to come from the Bank’s partnership with the company.

Also, President of the Nigerian Society of Engineers (NSE), Ademola Olorunfemi, disclosed that a few years ago when the body paid a visit to the vehicle plant, they were given an IVM bus to carry out a product analysis on it.

  “We did observe that being an effort in the right direction, more needed to be done to introduce more local content into it and more.

"Today, within two years Innoson has improved on all our recommendations and increased the vehicles' local content up to 70 per cent which is not less than what is obtainable elsewhere in the world,” he said.

He said the Innoson Vehicle Manufacturing Company Ltd had been granted permit by NSE to use its seal, while the CEO, Chukwuma, would be inducted into the NSE hall of fame, making him the 19th person in over 60 years of the body’s existence to be so highly honoured.

  He urged President Jonathan to muster all the political will at his disposal to mandate the use of only made-in-Nigeria cars by all MDAs.
Representing the Anambra State Governor, Willie Obiano, his Deputy Nkem Okeke commended the Innoson group for its developmental strides, value addition and job creation.

“It is not only through trade that a nation can develop, but through the conversion of our local raw materials into finished products. Therefore we will continue to support Innoson and other well-meaning industrialists,” he said.

Okeke stressed that the only way a company like Innoson can develop is when the nation buys the products of local manufacturers.

“I thank BoI and I hope that what they have done for Innoson will be extended to other industries from this state in our quest to provide jobs for our citizens,” he said.

In his remarks, Chairman of the occasion and National President of the Manufacturers Association of Nigeria (MAN), Dr. Frank Jacobs, noted that the feat of achieving the production of made-in-Nigeria cars was attained despite the challenging business environment which manufacturers are facing in the country.

“It is a testimony that the federal government’s Auto Policy is working. The automobile industry bill has not yet been passed by the National Assembly and we are all expecting that it will be done soon enough,” he said.