FG Plans Credit Purchase Scheme in Automotive Industry

By James Emejo in Abuja

Director-General, National Automotive Design and Development Council (NADDC), Mr. Jelani Aliyu, has disclosed that talks are currently ongoing with three financial institutions to enable Nigerians purchase locally produced cars on credit at single digit interest rate while payment can be completed over a period of time.

The move is aimed at stimulating consumer spending which is considered to be low in the country.

Aliyu said the credit arrangement was necessary to stimulate the automobile sector, boost job creation and economic growth as well as diversify the economy away from oil in line with the agenda of President Muhammadu Buhari’s administration.

Speaking in Abuja while making a presentation to Governor of Katsina State, Alhaji Aminu Bello Masari, on a proposal to establish an integrated automobile body, mechanical and spare part village in the state, Aliyu said the initiative was expected to take off in the third quarter of the year.

He said: “Another challenge that people are facing in Nigeria is that when you buy a vehicle, you have to put down a hundred per cent but in other places, people put down may be 10 per cent and they drive off with the vehicle and pay over five or six years.

“We are working with three banks to also do that here: Wema Bank, Jaiz Bank and Stanbic IBTC.

“By the time this takes off, within the next quarter, Nigerians will be able to buy made-in- Nigeria vehicle at interest rate of just about six to nine per cent single digit because currently it is about 28 per cent.

“So these would all be incentives to help boost the production of vehicles in Nigeria and continue to promote the economy.”

However, the proposed ultra-modern mechanic village is aimed at reducing the existing city wide spread concept and act as skills acquisition center for youth as well as reduce heavy metal pollution of soil due to poor waste management among others.

Masari, who expressed delight at the concept said his administration would back the project as it aimed to address the plight of the poor, save revenue hitherto lost to car service by quacks as well as bring about some measure of regulation to a sector which had not been regulated for years.

He, however, challenged NADDC to come up with tailored training that takes into consideration the educational level of the people in determining the choice of technology to be deployed as most of the mechanics especially in the North West lacked basic education to understand new advanced technology.

He urged the NADDC boss to engage the Central Bank of Nigeria (CBN) in order to access its single digit funding intervention to implement laudable programmes for the benefit of the masses in the automotive industry.

The governor noted that transportation will play more than 40 per cent role towards the successful transformation of the agricultural sector, hence the need for the former to tap into the CBN facilities to promote its initiatives as it could be difficult to obtain single digit lending from commercial banks.