The Federal government of Nigeria has revealed that it would soon be giving loan to Nigerians at a 6% interest rate to encourage the purchase of made in Nigeria vehicles as a way of boosting local production in the country.
Disclosing this while interacting with newsmen in Abuja, the Director General of the National Automotive Design and Development Council ( NADDC ), Jelani Aliyu said the policy was aimed at discouraging importation of vehicles into Nigeria.
He said the Agency would soon roll out a financial scheme that would afford Nigerians the opportunity to purchase vehicles with only 10% of the market total price of vehicle, and widow of many years to pay the remaining balance at an interest rate of 6-8 percent.
Aliyu noted that giving access to vehicle financing was an important step forwards supporting the capacity of local manufacturers in the country.
Jelani explained that, ” in other nations when you want to buy a vehicle, you go, you put down 10% to 15%, you drive off with the vehicle and you pay for it for a number of years at just 6% interest rate, but that is non-existence in Nigeria “.
He lamented that ” when you have vehicle financing system with an interest rate of about 20 per cent, it is high”. Adding that the Council had concluded plans with three indigenous banks to enable access to vehicle financing at a low-interest rate.
“We have funding, we are going to be working with this, we are talking with three banks, we will soon be rolling out what we call the Automotive Vehicle Finance Scheme”.
Jelani however said the access to the finance will only be provided for vehicles that were manufactured in Nigeria. ” in about a month and half, we will roll out the vehicle finance scheme so that Nigerians will be able to put in maybe 10% or less and drive off with the vehicle and pay over a couple of years at just 6-8 per cent interest rate.
” We really think this will improve local capacity for production of vehicles in the country and these finances were for only made in Nigeria vehicles ” he noted
He said that the country was spending over $8 billion on the importation of vehicles and other automotive related products. “That is $8 billion that simply goes out of our economy to purchase 300-400 vehicles per year.
“Most of these vehicles are used so there is a lot of challenges with efficiency, safety, not to talk of zero contribution into our economy”.
The DG said the Council was working to discourage importation and encourage manufacturing as three industrial parks was currently being built to alleviate the infrastructural deficit that has also been a barrier to local production in Nigeria.