Nigeria targets 19% local auto parts production as imports exceed $3bn

The Federal Government of Nigeria aims to produce 19 percent of the country's automotive components locally, as imports of vehicle spare parts and other components exceed $3 billion annually. Dr Chris Osa Isokpunwu, the Permanent Secretary of the Federal Ministry of Industry, Trade and Investment, stated that achieving this target requires a shift from vehicle assembly to local manufacturing, which can be supported by affordable financing, reliable infrastructure, and stronger collaboration between the public and private sectors.

Nigeria currently has over 11 million vehicles on its roads, creating a significant market for batteries, filters, tyres, and other components. However, around 90 percent of vehicles and spare parts used in the country are imported, while only five to six percent are assembled locally. This heavy reliance on imports results in an annual spend of more than $3 billion, which strains foreign exchange reserves.

Isokpunwu warned that continued dependence on imports would hinder local industrialization. The National Automotive Design and Development Council (NADDC) emphasized that local component manufacturing is crucial for automotive industrialization, as it creates more employment, facilitates technology transfer, and generates economic value compared to vehicle assembly alone.

The council identified several challenges, such as high energy costs, unreliable electricity, limited financing, inadequate raw materials, outdated technology, and substandard imports. To address these issues, NADDC plans to develop automotive industrial parks to provide shared infrastructure and reduce production costs. The Motor Vehicles and Miscellaneous Assembly Group's chairman, Elder Robert Ugboaja, noted that capacity utilization in the local components sector is low, around six percent or less, and called for industrial clusters to share facilities and lower production costs.

Joseph Atile, the Assistant Comptroller-General of Customs, urged NADDC to strengthen product standard enforcement and improve coordination among government agencies. Chief Anselm Ilekuba, the National Coordinator of the Automotive Local Component Manufacturers Association of Nigeria, stressed the need for affordable financing, modern technology, reliable infrastructure, and the use of locally manufactured products to reduce import dependence and strengthen the country's automotive manufacturing industry.