Forex: FG may grant concessions to automakers

The Central Bank of Nigeria (CBN) may offer some form of concession to automakers and vehicle assembly plants to enable them function effectively.

This indication was given by the National Automotive Design and Development Council in Lagos at the opening of Perfection Motors Nigeria Limited FAW Truck plant and showroom.

The council appealed to the Federal Government to grant concessions to local auto assemblers in the country to source foreign exchange for the development of the local auto assembly plants.

The Director, Policy and Planning, NADDC, Luqman Mamudu, said, “We are talking to the government to give the automotive industry concession in foreign exchange.”

Although the naira is exchanged at N197 against the dollar as the official rate, it hovers between N295 and N305 at the black market following the decision by the CBN to stop selling the greenback to the bureau de change operators

Only in very few cases are importers and travellers allowed to use the official rate window for their dollar or other major currency needs. And currently, the auto industry operators are not on that special list.

But Mamudu is optimistic that the government would give priority to auto assemblers “because they create jobs for Nigerians.”

It will be recalled that the Federal Government had introduced a new automotive policy in the third quarter of 2013 with the hope of encouraging automakers to set up vehicle manufacturing/assembly plants in Nigeria.

While fully built vehicles are to attract 70 per cent import tariff, the semi-knocked down and completely knocked down components needed by local assembly plants are allowed to be imported at low and zero tariffs, respectively.

The intention, according to the government, was to make the locally made or assembled vehicles available at affordable prices.

But with the current high forex rate sourced at the BDCs, the prices of vehicles have reportedly gone up by over 60 per cent.

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