The federal government last week announced a plan to launch a new ownership scheme that will enable more Nigerians to acquire private vehicles with ease. Director-General of the National Automotive Design and Development Council [NADDC] Malam Jelani Aliyu announced this when Honda HR-V was recently introduced into the Nigerian market at NADDC headquarters in Abuja. He said the federal government would soon roll out “the much-awaited Automotive Vehicle Finance Scheme (AVFS) before the end of June.”
According to Aliyu, Nigerians aspiring to own vehicles but without the needed funds can obtain soft loans to do so from the participating banks. He said NADDC was partnering with three commercial banks on the scheme. He said vehicle loans would be given to eligible Nigerians after they made an initial deposit of 10 per cent of the total cost of the vehicle they desired to buy at a six per cent interest rate. He expressed concern that Nigeria was spending over $8 billion annually on the importation of vehicles and other automotive products. He said the figure simply goes out of the economy to purchase 300-400,000 used vehicles with a lot of challenges of efficiency, safety and zero-contribution to the economy.
The NADDC boss said the scheme was being implemented under the National Automotive Industrial Development Plan (NAIDP). He said NAIDP contains a number of policy measures needed to revitalise the industry for local value addition, job creation and technology acquisition. He said the scheme covers only vehicles manufactured in Nigeria, adding that at a low-interest rate, the country’s large population would be able to own any vehicle of their choice and pay over a couple of years.
A cheap-interest loan facility that supports Nigerians to own vehicles sounds popular and compassionate but it should not be our national priority right now. It is better if soft loans are channelled to public transporters in order to enable them acquire buses at cheaper rates. Given the level of our infrastructure, we already have too many private vehicles in this country. Due to many years of neglect, most Nigerian roads are in a state of disrepair, with many of them requiring expansion. Available statistics show that 5,000 tankers are involved in transportation of 150 million litters of petrol needed daily to bridge supply of fuel to filling stations for the use of the huge number of vehicles on Nigerian roads. This is already a challenge.
Besides the traffic gridlock that will sprout from a surge in the number of vehicles to be provided by Aliyu’s AVFS, more tankers would equally be required to haul petroleum products across the country, with additional stress on facilities. Thus, Jelani Aliyu’s postulation would, rather than provide a solution, create more problems. The automotive policy disclosed by Jelani Aliyu should be aligned with Nigeria’s national transport policy, which is essentially not about owning a vehicle but more about efficient public transportation where citizens would leave their personal vehicles at home and take a train or bus to work, market place etc.
The traffic situation on some of our intra-city roads is better imagined if, for example, the BRT buses in Lagos and the buses operated by the Abuja Urban Mass Transport Company in Abuja were never provided. Other means of transportation have been explored more in developed countries than in developing countries. Many people in developed countries use bicycles for short distance travels. In Nigeria however, one is considered poor if he rides on a bicycle even though it reduces traffic hold-ups on roads and saves time for commuters.
The country’s railway system also needs to be revamped. Trains are the cheapest means of transportation and they take heavy goods and many passengers at a time. Exploring this option will, aside other benefits, check traffic congestion and reduce pressure on Nigerian roads. Transportation is a major driver of economic development. Nigeria’s strategic target should be to develop the country’s transport infrastructure for efficient mass transit, not for everybody to jump into a car.