Nigerians Query automotive industry’s MoU with Volkswagen Group

Business News

THE recent signing of a Memorandum of Understanding (MoU) by the Nigerian government with the Volkswagen Group to develop a joint vision for an automotive hub in the country is causing ripples among Nigerians from different walks of life.
Recall that last week, during the visit of German Chancellor; Merkel to the country, the Federal Government signed an MOU with Volkswagen to develop a joint vision for an automotive hub.
“I was pleased to sign on behalf of Nigeria, while Volkswagen’s Head of Sub-Saharan Region, Thomas Schaefer signed for the company,” said Nigeria’s Minister of Industry, Trade and Investment, Dr. Okey Enelamah, on Twitter.
Here is what some Nigerians that have been following the development on social media said:
Bello Ramon Adeniyi‏ : “Well done… What opportunities does this agreement offer to Nigeria and Nigerian? What make this agreement different from 100s of other similar agreements we’ve signed with Multinational Corporations (MNCs) in the last 20yrs?”
Tahood Laguda, who also reacted, said: “Can you educate further pleases. Will this translate to cars being built in Nigeria? 100% or what % pleases? Which parts, manufacture or assembly & supply will be Nigeria owned? What are the likely numbers of direct & indirect jobs to be created? Number of cars will be sold annually? Target date pleases?
Equally, Wiliam Boason: said:“ But we’re yet to feel the impact of a similar one signed sometime ago with Nissan. Nigerians can hardly afford Tokunbo cars not to talk of brand new ones. Auto financing is, as always . . . (fill the blank space). Is MOU signing becoming a KPI-fulfilling activity?”

“What make this agreement different from 100s of other similar agreements we’ve signed with Multinational Corporations (MNCs) in the last 20yrs?”

MoU Details
In the MoU, Volkswagen undertakes to implement a phased approach in relation to the assembly of vehicles, initially from assembly kits with the long-term view of establishing Nigeria as an automotive hub on the West Coast of Africa.
This will include establishing a training academy in conjunction with the German Government, which will train the initial employees. The academy will also provide broader technical training in automotive skills. It is also intended that a comprehensive Volkswagen vehicle and service network is developed in the country subject to commercial viability.
In turn the Nigerian Government undertakes to finalise the approval of the Nigerian Automotive Policy, currently under consideration.
This includes the gradual transition from the importation of used cars to the manufacture and distribution of new passenger vehicles.
The Government has committed to providing a conducive legislative environment that will encourage the manufacturing of motor vehicles in Nigeria.
Nigeria’s Minister of Industry, Trade and Investment, Dr. Okey Enelamah, who signed on behalf of his government, said: “The MoU is a major step in our walk towards the development of a robust automotive industry to achieve its potential contribution to the continuous economic development of the country.”

“We believe in the strategic and catalytic role of the automotive industry in the diversification of the Nigerian economy and we remain committed to encouraging and partnering with relevant stakeholders, especially investors and friends of Nigeria.
“We will meet our commitments and look forward to welcoming other Original Equipment Manufacturers (OEMs) interested in working with us to increase local production, local procurement, and exports,” added Dr. Enelamah
.The Director General of the National Automotive Design and Development Council (NADDC), Jelani Aliyu, said: “As Africa’s largest economy and most populous country, Nigeria offers not only a significant domestic market, but also the opportunity of a gateway to the West African market.
“We are pleased by the progress we have made in our engagement with Volkswagen, and excited to be partnering with a strong stakeholder with a full understanding of the huge potential Nigeria represents.”

Track Records
Thomas Schaefer commented: “Volkswagen has been able to demonstrate with conviction that it is serious about its intentions in Sub-Saharan Africa. We are well placed to become a dominant player in Africa, as the continent continues to stabilise and develop economically, as the last frontier for the automotive industry.”
Volkswagen has a fully fledged manufacturing facility in South Africa, and assembles vehicles in Kenya, Algeria as well as in Rwanda, in conjunction with an Integrated Mobility Solution offering Community Car Sharing and shortly to be launched Ride Hailing.


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