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Reducing imported vehicles tariff will worsen economy, NAMA warns

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The Nigerian Automobile Manufacturers Association has warned that the plan by the Federal Government to cut the import tariff on vehicles will worsen the nation’s economy.

Executive Director of NAMA, Remi Olaofe, who sounded the warned, specifically said it would lead to loss of more jobs; kill the local automotive industry gradually being revived, as well as make Nigeria a dumping ground for all manner of imported vehicles.

Olaofe, who spoke at a capacity training programme organised by the Nigeria Automobile Journalists Association (NAJA) in Lagos, said NAMA was already engaging the government on the need to rescind this decision as encapsulated in the new finance bill.

His viewed tallied with Chief Innocent Chukwuma’s, Chairman, Innoson Vehicle Manufacturing Company Limited (IVM) in a recent interview with journalists, who said that the reduction of the tariff would be a disincentive to investments, in addition to setting Nigeria’s automotive industry back by at least 10 years.

Chukwuma described the government’s plan as a “shocking decision,” stressing that it would lead to the forced closure of many auto plants in the country.

The Federal Executive Council (FEC) recently announced the plan to reduce the import duties and levies on buses, tractors and other vehicles as contained in the 2020 Finance Bill.

The government said it would reduce the tariff on tractors from 35 per cent to 10 per cent; goods transporting vehicles, from 35 per cent to 10 per cent; and those for transporting people, from 35 per cent to five per cent.

Olaofe urged the government to revive the National Automotive Industry Development Plan (NAIDP) 2013 for the growth of the automobile industry in Nigeria, stressing that policy inconsistency had been the bane of growth of the country.

He recalled how the announcement by the FG of the “National Automotive Industry Development Plan (NAIDP) in 2013 and the subsequent increase in the import tariffs on Fully Built Vehicles (FBUs) attracted the interest of leading auto assemblers.

“With most of the newly established Auto Assembly plants still at their teething stage, the automobile industry was rattled when the content of the proposed finance bill was released to the public.”

Olaofe said reducing the imported vehicles tariff could “result in reversal of huge foreign investments being channelled to this sector of the Nigeria economy; (put) pressure on the already scarce foreign exchange with its attendant pressure on our trade balance; avoidable gross failure of ancillary industries that largely depend on the auto assemblers; worsened unemployment from layoffs and business failures; and Nigeria returning to vehicles dump ground.”

Olaofe lamented that while Nigeria was still toying with the implementation of NAIDP, the neighbouring West African country, Ghana, which “borrowed Nigeria’s automotive bill,” had turned its own into a law with automobile companies jostling to establish plants in that country.

With this position, he argued that the implementation of the African Continental Free Trade Area (AfCFTA) in 2021 would further weaken the Nigerian economy as goods and products from Africa could come in without restrictions.

He said, “It can’t be in the interest of this country to say that the NAIDP Bill 2013 is about to collapse. There is no single part of vehicles that is manufactured in this country. We used to produce tyres, they are no more here. We produced batteries in this country before, it has become a history. In Kaduna, we had a company assembling Peugeot vehicles, it is no more there. The assembling plants are not doing anything again.

“There is no economy in the world where you see vehicles manufacturing go from zero to a Complete Knock Down (CKD); there is a process. It is a driven process.  Money is involved. Automotive policy is the best we have; but we want to destroy it. This is very scary.

By next year, we are starting with the AfCFTA . What is going to be the hope of this country? Ghana borrowed the auto policy of Nigeria, Ghana has commenced implementation. I was in Rwanda last year to see its assembly plant; it is still this Semi Knocked Down (SKD). The issue is that you cannot have an auto assembly without the market. We have got the market here.”

He urged Nigeria to use its market to its advantage, adding that other African nations were targeting the market

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I don’t need your cheques, Buhari tells contractor

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President Muhammadu Buhari on Friday charged contractors who have enjoyed government patronage as well as other privileged citizens to use their resources to support less privileged members of society.

 

President Buhari gave the charge when he paid a visit to the Emir of Daura, Dr Umar Faruk Umar.

 

He said passing gifts and ‘cheques’ to people in authority or already comfortable to buy favour is not the right approach.

 

According to a statement by his Senior Special Assistant on Media and Publicity, Mallam Garba Shehu, President Buhari challenged beneficiaries of government patronage to go to their respective communities and engage in corporate social responsibilities.

 

The President said: “I don’t want your cheque. Go and assist our communities” instead of trying to return kickbacks to public officers, including his office.

 

“We don’t want cheques from anyone or organisation as returns or influence of any kind. Let them remember their Corporate Social Responsibilities,” he said.

 

The President noted he would love to visit Daura more frequently but for the high cost of presidential movements and exposing security personnel to the weather, assuring his heart remains with the people.

“We are known for farming and I have my farm here. I could come every two weeks and no one can stop me.

“But the cost to the movement is high. I would rather that it be used to better our schools, clinics and hospitals,” said the President.

The President said the grace of God had kept Nigeria together as a country in spite of differences that led to a 30-month civil war

 

“We want to thank God always for keeping us together as a country. From January 15, 1966, the country was thrown into political crisis. We had a 30 months civil war that resulted in the loss of about a million lives.

 

“We still thank God for keeping us together. We remain grateful to all those who showed interest in our unity and progress. May God continue to bless them,” he added.

 

The President, who recalled fond memories of visiting the Palace as a military Head of State, expressed happiness that the warmth and hospitality of the traditional institution had been sustained over the years.

 

At the meeting, the Emir publicly announced conferment of the title of Talban Daura on Yusuf Buhari, son of President Buhari.

 

He said a date would be announced for the turbaning ceremony of the President’s son, which might likely be before his marriage.

 

The Emir also announced creation of a District in the community of the President, with headquarters in Dimurkol.

He said the turbaning of younger Buhari and creation of the District was to further extend and deepen the long relationship between the Palace and the family.

 

He said the decision was in agreement with the kingmakers in Daura Emirate Council.

 

During the visit, the Palace used the opportunity to clarify the difference between two titles, Talban Hausa, given to Alpha Conde, the President of Guinea and Talban Daura designated for Yusuf, the President’s son.

 

The Palace explained that Daura, as the linchpin of the Hausa society had conferred titles that have bearing on the Hausa Kingdom and those that are specific to the Emirate.

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World Bank: Nigeria’s unemployment rate rose five-fold in 10 years

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The World Bank says the unemployment rate in Nigeria rose five-fold in the last 10 years.

From 6.4 percent in 2010 to 33.3 percent at the end of 2020, the Bank said the significant increase affected Nigerian youth in their quest to find gainful employment opportunities.

 

In March, the National Bureau of Statistics (NBS) reported that Nigeria’s unemployment rate climbed to 33.3 percent in the fourth quarter (Q4) 2020 from 27.1 recorded in the second quarter (Q2) 2020.

 

The NBS had said a total of 23.18 million persons in Nigeria either did nothing or worked for less than 20 hours a week, making them unemployed during the fourth quarter (Q4) 2020.

According to StatiSense, a data technology company, with 33.7 percent, Nigeria ranked top among the list of countries with the highest unemployment rate globally.

 

In its recent report, titled, ‘Of Roads Less Travelled: Assessing the Potential for Migration to Provide Overseas Jobs for Nigeria’s Youth’, the World Bank said the labour market has significantly worsened following the 2016 recession and COVID-19.

 

The Bank said the acute jobless crises caused socio-economic challenges for the rising working-age population resulting in an increase in the number of citizens seeking asylum and refugee status in other countries.

“The expanding working-age population combined with scarce domestic employment opportunities is creating high rates of unemployment, particularly for Nigeria’s youth,” the report added.

 

“Since 2018, the active labour force population has dramatically decreased to around 70 million—lower than the level in 2014— while the number of Nigerians in the working-age population but not active in the labour force has increased from 29 million to 52 million between 2014 and 2020.

 

“Similarly, Nigeria’s active labour force population, that is, those willing and able to work among the working-age population, grew from 73 million in 2014 to 90 million in 2018, adding 17.5 million new entrants to Nigeria’s active labour force.”

 

The Bank advised Nigerian institutions to promote managed migration approaches that help create opportunities for prospective job seekers to find employment internationally.

It also added that Nigeria to implement and support schemes that increase the returns to human capital investments for youth.

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UK plans new scheme to drive trade with Nigeria

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The United Kingdom government has proposed a new scheme to help Nigeria and other developing countries to drive ‘free and fair’ trade in the post-Brexit.
In 2018, former Prime Minister of the United Kingdom, Theresa May, had hinted about a new trade deal and economic partnership during her visit to Nigeria.
In a statement on Thursday, United Kingdom Foreign, Commonwealth and Development Office (FCDO) said the new plan will replace the UK’s generalised scheme of preferences (GSP) in 2022.
The statement added that the new scheme, Developing Countries Trading Scheme (DCTS), will be an opportunity for the UK to grow free and fair trade with developing countries, boost the economy and support jobs in these countries as well as for British citizens.
The scheme aims to contribute to developing countries’ integration into the global economy, creating stronger trade and investment partners for the future and strengthening supply chains.
“The UK currently operates a similar scheme rolled over from the EU, but as an independent trading nation we can now take a simpler, more generous, pro-growth approach to trade with developing countries,” it stated.
“The UK Developing Countries Trading Scheme will apply to 47 countries in the Least Developed Country Framework (LDCF) and 23 additional countries classified by the World Bank as low-income and lower-middle-income countries.
“The proposed new UK scheme will mean more opportunity and less bureaucracy for developing countries, for example by simplifying rules of origin requirements or reducing tariffs on imports. For instance, this could mean lowering tariffs on products including rice from Pakistan and raw materials from Nigeria.”
Dominic Raab, UK foreign secretary, said cutting tariffs for poorer countries enabled them to trade their way to genuine independence.
International trade secretary, Liz Truss, said trade fundamentally empowers people and has “done more than any single policy in history to lift millions of people around the world out of poverty.”
“Now the UK is an independent trading nation we have a huge opportunity do things differently, taking a more liberal, pro-trade approach that leads to growth and opportunity.
“Countries like Bangladesh and Vietnam have proven it’s possible to trade your way to better living standards, and our new Developing Countries Trading Scheme will help others do the same.”
Emma Wade-Smith OBE, Her Majesty’s Trade Commissioner (HMTC) for Africa, said: “The DCTS scheme signals the UK’s strong appetite to promote free and fair trade.
“It is a demonstration of our commitment to help boost economic growth and prosperity in Africa, by enabling businesses there to access the UK market more easily.
“The UK is committed to strengthening our commercial relationship with African partners.
“The new DCTS scheme will create a smoother path for companies to export to the UK. I encourage the African business community to contribute to this important consultation.
“We want to hear a range of views and perspectives, to ensure the scheme targets those areas that will have the greatest positive impact on growing our bilateral trade”.
In line with the development, the British government launched an eight-week public consultation on the UK future tariff schedule and policies in relation to the GPS that began on July 19 and will close on September 12, 2021.
It also invites views from Nigerian businesses and stakeholders with interest across the globe to send responses to the consultation via this link until September 12 closing date.
The scheme is targeted at 47 least developed countries and 23 low income and lower-middle-income countrie

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