Nigeria to boost automotive sector with N23bn from Wesbank

A sub-Saharan Africa’s largest provider of auto loan is working with Johannesburg-based FirstRand’s Wesbank to assist the federal government with N23billion ($73 million) to boost the country’s automotive sector.
Mr Luqman Mamudu, the director of policy and planning of the National Automotive Council disclosed this in Abuja stating that an application for a banking operating license would be submitted to the Central Bank of Nigeria this week for Wesbank. Mamudu said that the federal government would contribute an initial N7.5 billion to the fund, to be managed by Wesbank while additional funds are being sought from development finance institutions and Nigerian banks.
In the similar manner, African Association of Automotive Manufacturers led by executives from Ford and Nissan are talking with the national assembly about building their own plants in Nigeria. Ford sub-Saharan Africa’s chief executive officer, Mr Jeff Nemeth said the group was also discussing with Nigeria and Kenyan authorities to develop an auto-manufacturing industry in the east African country.
Nemeth said, “What we talked to them about in all the meetings is that, if you are really interested in this, then it can’t just be about bringing assemblers in.”
He added, “It’s got to be about bringing in the whole value chain, the whole ecosystem.”
“Vehicle ownership per thousand people is about a quarter of the global average and there’s barely any automotive manufacturing between South Africa and the countries in the north of the continent. Challenges include the volume of imported used cars, a lack of vehicle-financing options and poor road and ports infrastructure.”
The group which also includes Toyota, General Motors, BMW and Volkswagen, had taken advantage of a new surge of interest from African governments in building vehicles locally. The interest in developing auto industries in sub-Saharan Africa has grown as oil- and commodity-dependent countries seek to diversify their economies amid weaker prices.