BY LEKAN SOTE
Nigerians must be encouraged by the rollout of the 2000th car off the assembly plant of Chinese automobile manufacturers, GAC Motors, by the Lagos State Governor, Babajide Sanwo-Olu, some weeks ago.
But President Bola Tinubu needs to start talking with local talents like a former Director General of National Automotive Design and Development Council, Jelani Aliyu, who is also a former automobile designer for America’s auto giant, General Motors.
You see, every modern economy still needs its brick-and-mortar sector, even though digital technology is redefining the economy of the world into what has now been described as the ‘new economy.’
Of course, the President should also talk with foreign automobile manufacturers to establish new automobile plants, expand those still running and revive the dormant automobile assembly plants.
Former President Goodluck Jonathan invested N1bn to revamp Nigeria’s automobile industry, though no one could really tell how the funds, still enveloped in some mystery, were disbursed.
In 2014, NADDC reportedly issued 40 licences to automotive firms, though only 37 are still in existence, even as production is nowhere near the 400,000 units that the Nigerian automobile market can absorb annually.
The government must assemble auto-economists, engineers and consultants to urgently find radical ways to reduce the cost of manufacturing or assembling automobiles in Nigeria and raise automobile sales revenue beyond the current puny N400m.
If successfully implemented, this should put into good use the Ajaokuta Steel Mill that is sitting idle in Kogi State after gulping more than $7trn without rolling out an ounce of metal, raise the country’s Gross Domestic Product, create new jobs, and pay tax to the government exchequer.
The elaborate automobile industry and its extensive credit system was a major contributor to the development and stability of the American economy.
“As much as possible each geopolitical zone of Nigeria should have at least two automobile assembly or manufacturing plants, as well as manufacturers of component parts, like engine blocks, parts and accessories.”
It provided jobs, increased America’s GDP and tax revenue to the government. Today, the automobile industry is three percent of America’s GDP.
The importance of the automobile industry is probably underscored by President Joe Biden joining the United Auto Workers Union’s strike against auto manufacturers who pay next to peanuts as minimum salaries and allowances.
This may have caused the invocation of the “too big to fail” idea by former President Barack Obama to guarantee necessary loans needed to avoid the collapse of America’s automobile industry some years back.
Recall that former American President Jimmy Carter also came to the rescue of Chrysler Motors toward the end of the 1970s- to save jobs for America, whose economy gained a lifeline there from.
If nearly every automobile will contain metal, iron, aluminum, brass, zinc, plastic, rubber, fabric, glass and paint, you can only imagine the extent of the ancillary industries of the automobile manufacturing sector and of the road construction industry that was $39.49bn or nine per cent of Nigeria’s GDP in 2022.
In 2022, the automobile industry was 7.78 per cent of China’s GDP. And with 2.12 million units, it was the third exporter of automobiles, after Japan that exported 3.82 million automobiles and Germany, which exported 2.3 million vehicles.
This suggests that if well-structured and managed, the Nigerian automobile industry could generate significant export earnings, if not to the whole world, then, at least, to the West African sub-region, as 60 per cent of the sub-region’s GDP comes from Nigeria.
By the way, the mindset that the government needs to run ahead with this automobile game is that of a start-up, the pioneer spirit that is willing to start afresh, anew, willing and ready to take risks.
As much as possible each geopolitical zone of Nigeria should have at least two automobile assembly or manufacturing plants, as well as manufacturers of component parts, like engine blocks, parts and accessories.
And yes, of course, the Elizades, RT Briscos, and other major automobile distributors in Nigeria should be in this loop so that the people will have easy access to the products at reasonable costs.
And the plants should be located close to sources of their main raw materials, manufacturers of accessories, institutes for training relevant manpower (like the Lekki-based Nord automobile manufacturers with a showroom on the University of Lagos campus), and energy source.
Now that lithium is available in vast quantities in Nigeria, Elon Musk should be easy to persuade to (at least) assemble his Tesla electric automobiles in Nigeria. That shouldn’t be too difficult to achieve.
The Minister of Solid Minerals, Dele Alake, should be on the next available flight to have a definitive meeting with Musk. He should also be gearing up work to ready the lithium mines for optimum performance.
The Minister of Industry, Trade and Investment should join Alake on the trip. And there should be a timeline such that the electric automobile plant should be rolling out vehicles before the end of the first four-year term of this government.
Because lithium is the future of automobiles, batteries and the global economy, as fossil fuels will be fading off because they accelerate global warming and have dangerous effects on the earth and its people, the Federal Government should move speedily on lithium exploitation.
Some experts are even whispering that lithium, like gas, should be able to substantially produce fuel to power electricity generating plants. If Alake can confirm this, it will not be necessary to advise him to zoom in that direction.
As the government pushes the electric automobiles idea, it should also find a way to accommodate the Compressed Natural Gas option. After all, Nigeria is primarily a producer of natural gas, more than it is a producer of petroleum.
The automobile development team should provide a road map to converting Nigerian vehicles to be CNG-compliant within a short period. One way to do this is to convert some of the moribund assembly plants to conversion centres.
The government must (necessarily) work with more experienced global automobile manufacturers as well as the nation’s university system in order to marry available auto-manufacturing experience (of the West and Asia) with appropriate local technology within Nigeria.
There is a report of a young man (in the North-East region of Nigeria) who has been able to assemble battery-powered vehicles. Jelani Aliyu should be engaging him, instead of just patting him on the head without making any commitment to take advantage of his skill and talent.
Nigeria’s policy must realise that every economy grows from a series of intentional decisions that generate economic activities. Theorists, who think economies are run by the power of an invisible hand, wrought by Adam Smith, have no idea how economies really work.
The law of supply and demand has to be helped to work. You may not have noticed that the suggestion by Maynard Keynes that a group of idle men can be paid to dig a hole, while another set is paid to refill the hole, will directly raise the Gross Domestic Product of the economy.
That is the rationale behind the regular urban renewal policies of many Western economies: When they initiate urban renewal policies, they activate all the sub-sectors of the construction industry.
Apart from the obvious infrastructural and development benefits for the citizens, the economy profits from the reduction in unemployment, sale of every category of construction materials and tax revenue for the government.
The products of the automobile industry, which are not going out of fashion very soon, can revive the economy.
