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

The Federal Government has set a target of producing 19 per cent of Nigeria’s automotive components locally, as the country spends more than $3bn annually importing vehicle spare parts and other components.

The Permanent Secretary, Federal Ministry of Industry, Trade and Investment, Dr Chris Osa Isokpunwu, said achieving the target would require a shift from vehicle assembly to local manufacturing, supported by affordable financing, reliable infrastructure and stronger public-private sector collaboration.

He spoke in Lagos at a sensitisation workshop on local automotive components manufacturing, organised by the National Automotive Design and Development Council (NADDC).

Isokpunwu said Nigeria had more than 11 million vehicles on its roads, creating a substantial market for batteries, filters, tyres and other components. However, about 90 per cent of vehicles and spare parts used in the country were imported, while only five to six per cent of vehicles were assembled locally.

He described the annual spending of more than $3bn on imported automotive components as a major drain on foreign exchange, warning that continued dependence on imports would undermine local industrialisation.

“We cannot continue to rely on imported component parts. More than $3bn is spent on importing spare parts and knock-down parts. That is a huge drain on our foreign exchange,” he said.

He said the African Continental Free Trade Area offered local manufacturers access to a market of more than 1.4 billion people, urging stakeholders to develop competitive products that meet international standards.

The Director-General of NADDC, Otunba Oluwemimo Joseph Osanipin, said local component manufacturing was central to the country’s automotive industrialisation strategy.

He said components created more employment, technology transfer and economic value than vehicle assembly alone, noting that the council’s assessment had identified significant gaps between local demand and production.

Osanipin listed high energy costs, unreliable electricity, limited financing, inadequate raw materials, obsolete technology and substandard imports among the challenges confronting manufacturers. He also disclosed plans to develop automotive industrial parks to provide shared infrastructure and reduce production costs.

The chairman of the Motor Vehicles and Miscellaneous Assembly Group, Elder Robert Ugboaja, said capacity utilisation in the local components sector was about six per cent or less.

He called for industrial clusters where manufacturers could share electricity, water and other facilities, while urging investors to consider changing automotive technologies before committing funds.

The Assistant Comptroller-General of Customs, Joseph Atile, who represented the Comptroller-General, said genuine industrialisation required moving beyond semi-knocked-down vehicle assembly to producing batteries, filters, plastics, tyres and other components.

He urged NADDC to strengthen enforcement of product standards and improve coordination among government agencies.

Similarly, the National Coordinator of the Automotive Local Component Manufacturers Association of Nigeria, Chief Anselm Ilekuba, called for affordable finance, modern technology, reliable infrastructure and deliberate patronage of locally manufactured products.

The stakeholders stressed that effective policy implementation and sustained collaboration were necessary to reduce import dependence and strengthen Nigeria’s automotive manufacturing industry.