Bills to prioritise locally manufactured automobiles pass second reading

The Senate on Thursday passed for Second Reading “A Bill for an Act to make it mandatory for Ministries, Departments, and Agencies to give priority to local automobile manufacturers and indigenous companies in the procurement process.” The bill was sponsored by the Senator representing Imo North, Ndubueze Patrick Chiwuba.

In his lead debate, Senator Ndubueze noted that Nigerians’ preference for imported goods, particularly automobiles, constitutes a strain on the strength of the naira and ultimately undermines local industries.

He said: “We have failed to institutionalize the use of indigenous products, brands, and services in Nigeria and have instead glorified foreign goods of no particular superior quality. Today, we see the see-sawing of the naira, and with every plunge, inflation bites harder.”

The lawmaker noted that the absence of protection for local automobile companies has depleted their number from 54 to 6, while the surviving ones struggle to stay afloat in the face of foreign exchange and infrastructure challenges.
“Several automakers have moved to nearby Ghana and are setting up assembly plants there with plans to export the vehicles to Nigeria.”

He maintained that a policy pronouncement by the federal government on the use of made-in-Nigeria vehicles would go a long way in stabilizing the automobile sector.
“How do we stem the free fall of the naira if we cannot address our appetite for foreign goods? How do we support the development of indigenous brands if the biggest spender, year on year — the government — refuses to buy made-in-Nigeria goods?”

He proposed that at least 75% of official vehicles used by public officers and civil servants should be locally manufactured, not merely assembled.
“This is the first step to saving our economy, protecting our currency, and creating jobs for our people.”

He further declared that to qualify as local manufacturers, companies must meet certain criteria, including employing a 70% Nigerian workforce, investing 75% of their R&D budget locally, and possessing full-scale technology like robotic painting machines and electrophoresis systems.

He argued that “government support for local industry should be seen as both strategically important, a long-term investment, and a national security imperative.”

He noted that Nigeria could learn from countries like China, India, and Malaysia, which initially banned imported cars to grow their local automotive sectors.
“Today, these countries have perfected their local processes, and we are now importing their products, some of which cannot compete with our locally manufactured vehicles.”

Lending his voice in support, Chief Whip of the Senate, Tahir Monguno, said the proposal would give legislative backing to the Federal Executive Council (FEC)’s earlier directive on prioritizing local products.
“This law will insulate the directive from the whims and caprices of subsequent administrations who may want to reverse it.”

Also speaking in support of the proposed legislation, Deputy Senate President Barau Jibrin said the bill, if passed into law, would “provide jobs for automobile engineers in the country and encourage more investors to move into the sector.”

The bill was subsequently referred to the Senate Committee on Public Procurement for further legislative input, with a timeline of four weeks to submit its report.