Automotive policy: LCCI leads call for petrochemical, steel industries

Following the coming on board of the new automotive policy, the Lagos Chamber of Commerce and Industry (LCCI) has called for the establishment of ancillary industries such as petrochemical, iron and steel, foundries, batteries, among others, stressing that these are foundations upon which the policy should be built.

The automotive policy, which is attended by a new tariff regime, formally came on board on July 1. Nigeria’s policy makers believe it is a deliberate strategy to encourage local large-scale vehicle manufacture and assembly in order to create jobs and diversify the economy. But LCCI says there should be high value addition and capacity for backward integration; strong engineering infrastructure, particularly the iron and steel industry; foundries and fabrication of vehicle components, for this policy to achieve the desired results.

Remi Bello, president, LCCI, said there was the need to have a strong petrochemical industry that would supply plastic components in vehicle production, adding that sound infrastructure, such as power supply and transportation, was a sine qua non for success of the policy.

“There should be development of ancillary industries for the production of tyres, glass, radiators, tyres, among others,’’ he said, during the second quarter briefing held last Wednesday in Lagos.

According to the LCCI boss, the new tariff regime would lead to escalation of smuggling of vehicles, leading to revenue loss for the government and loss of maritime sector jobs, adding that a weak enforcement of the new tariff which could force out businesses.

On the functions of regulatory agencies, the LCCI said the functions of the Standards Organisation of Nigeria (SON) and the National Agency for Food and Drug Administration and Control (NAFDAC) often overlapped in sectors such as cosmetics, food, drinks and beverages, health and confectionery, among others.

“It is frustrating that a product inspection report produced by SON will be rejected by NAFDAC, and vice versa. Each of the agencies prefers to carry out an independent analysis for the same product with attendant cost and waste of time,’’ Bello said, adding that industrialists lamented the demand for compulsory product listing with the Consumer Protection Council (CPC) which often came with annual charges per product.

“SON normally does the calibration of equipment through their meteorology department. Weight and Measures does the verification to ascertain if the equipment are calibrated, Weight and Measure Unit still imposes outrageous charges on industries,’’ he said.

Odinaka Anudu