10 July 2014, Lagos – President, Lagos Chamber of Commerce and Industry (LCCI), Alhaji Remi Bello, has said that the chamber is concerned about the recent sharp increases in the import tariff and levies on motor vehicles.
He stated that the policy has potentially harmful effects on the economy and the welfare of citizens. “As a major stakeholder in the economy, the Chamber welcomes a policy thrust that seeks to promote self-reliance in the Nigerian economy because there is great value in domesticating spending”.
The President said this at the 2014 second quarter press conference held in Lagos. He explained that in pursuit of the laudable aspiration, proper policy sequencing was imperative; stressing that import dependency is only a manifestation of deeper issues of low productivity and weak competitiveness.
“It is inappropriate to begin the pursuit for a self-reliant automobile sector with the imposition of high import tariff on vehicles when there are fundamental supply side issues to resolve. Without a good foundation the superstructure cannot stand,” he added.
He noted that the recent tariff review would have negative outcomes for the economy such as escalation of smuggling of motor vehicles with corresponding loss of revenue to government; higher transportation costs with corresponding impact on inflationary conditions in the economy. This would happen because over 85 percent of the freight in the economy is moved by road; so also is the movement of citizens.
He said the creation of a sustainable automobile industry should be predicated on the high local value addition and capacity for backward integration, strong engineering infrastructure, especially the iron and steel industry including the production of flat sheets, foundries and fabrication of vehicle components and strong petrochemical industry to supply the plastic components in vehicle production.
On the Nigeria Industrial Revolution Plan (NIRP), the LCCI boss applauds the Federal Government on the plan saying that it symbolizes a clear commitment to industrialization by the present administration.
Bello said the plan was to increase manufacturing contribution to GDP to 10 percent of GDP over the next five years, from the current level of 6.5 percent [post rebasing]. Industrialization is the quickest channel to achieve an enduring economic transformation. “The LCCI is part of this process and will give all the necessary support to the Federal Government in this endeavour.”