Reverend Lambert Ekewuba is the Executive Director of the Motorcycle Manufacturers Association of Nigeria. If you call him a moving encyclopaedia of the Bicycle, Motorcycle and Tricycle industry in Nigeria, you may not be far from the truth.
The technocrat and motorcycle/tricycle representative on the board of the National Automotive Design and Development Council (NADDC), who has spent decades advocating for the growth of two-wheelers in the country, had a chat with Frank Kintum recently in Lagos on the challenges facing manufacturers and the state of the industry.
What are the major challenges facing motorcycle manufacturers in the country?
A major challenge facing manufacturers is the delay in revalidating their manufacturer/assembler status with the federal ministry of Finance in Abuja, which enables them to import Complete Knock Down parts at 5% duty. It is supposed to be done in one week highest, but more it takes up to six months or more.
The companies from where the CKD are imported already have a programme for export, and once it is time, they export, and when it gets here, there is challenge of concession renewal. This makes manufacturers to incur demurage in the ports, adding to their costs.
The cost of motorcycle in Nigeria can come down if government can do what is expected of them. You are entitled to 5% duty for motorcycle Knock Down parts, and because of the delay in renewing the concession papers, you are slammed with 20% duty which was not planned for.
Background to the concession to motorcycle manufacturers
It was around 2003, I picked up what President Olusegun Obasanjo said, that is his plan to assist us to manufacture motorcycle parts, bicycle parts, get up to 75% local content, so I wrote a letter. If you want us to achieve this, remove the 2% NAC levy, VAT and give us very low duty to pay, say 5%.
We got an appointment to meet with the President, it was then he recognised the motorcycle and bicycle manufacturers, the then Special Adviser, on Industry/ Manufacturing, Ahmed Abdulkadir was very committed to the issue. We told him we can manufacture some of these bicycle parts -frame, mud guard, rim etc. So when importing bicycles, these items will not be included. People were in good business, bicycle manufacturing started growing. We really prospered during Obasanjo period. However, when Ngozi Okonjo Iweala was removed, and shifted to Foreign Affairs, the whole thing became political.
One man promised he was going to manufacture bicycles, that is the owner of Diamond bicycles, convinced the Presidency, they gave him pioneer status and he flooded the market with 5000 bicycles, he never manufactured anything. This affected the local manufacturers.
Then we started moving to motorcycles, planning how we can do some deletion programmes. Even some motorcycle companies like Boulos and Innoson, were doing some in-house deletion programmes, though the parts were used mainly for after-sales parts. Boulos was producing chain case, oil filter, wiring harness. Innoson was doing headlamp assembly, foot rest. The motorcycle industry would have achieved a lot if they had allowed the momentum to be sustained.
Innoson was the only company then that support me to ensure we get all the necessary support from the federal government, to give us concession duty, to stop paying NAC Levy and to remove VAT.
Then, there are the fundamental problems like light issue, unstable exchange rates, not contusive manufacturing environment etc.
Our members are struggling to repay Loans, NADDC involvement
NADDC has been making efforts to do the deletion programme, but members have been asking, if we start it, will government support us? We take example from what happened to bicycle. Henry and Henry took a loan from NAC fund, up to N70m, imported a machine for manufacturing of bicycle rim, automated, modern machine, it is just packed there now. Another company had same issues. Henry and Henry had to pay his loan from other sources. Government opened the market, so he could not meet up again. The market was flooded.
One of the bicycle manufacturers called Ebele Journey Cycle, is in problem now, because he took loan to manufacture mud guard. When the ban was lifted, he could not meet up again. Bank of Industry is after him, I had to tell NADDC to intervene, this guy did not eat the money, the man is not stable again. They have now scheduled a meeting. It was a messed up progamme for bicycle. That is why we are agitating that motorcycle should be included in the NAIDP.
The NADDC licensed many auto companies that don’t have anything to show for it as assemblers of autos, though Innosson and PAN stand out.
A major problem of Nigeria auto industry is that motorcycle has not been carried along, they look at motorcycle as an aberration, and it is not good.
On the Director General, Jelani Aliyu, look at the background he came from. He came from where the system is working to where the system hardly works. The young man is trying his best. We are looking at electric motorcycles and electric tricycles. Though oil is Nigeria’s main stay, we cannot stay behind when the world is moving.
We are writing the Permanent Secretary, Ministry of Trade, Industry and Investment to amend the NAIDP Bill so motorcycle will be incorporated in the plan. For us in the motorcycle industry, we see the rejection (refusal of President Muhammadu Buhari to sign the Nigeria Automotive Industry Development Plan Fiscal Incentive and Guarantees Bill) as a blessing in disguise.
Motorcycle not an Aberration
Two months ago, I was in China, I saw where motorcycle was being used as a means of transportation. I took motorcycle myself. However, it was electric motorcycle.
I don’t agree with those who say motorcycle as a means of transportation is an aberration. I said I took a motorbike just a couple of months ago in China, this was not even in a rural area. Many people, when they travel to China, they remain in the capital, where there are many restrictions. People use it in China as a means of livelihood.
We should not underrate the importance of motorcycle, if you go to satellite town (Lagos) for instance, there are no roads, only motorcycles can pass.
We don’t have roads, something is an aberration in a country when government has done what it is supposed to do. For example, the new airport road in Lagos, can you enter a motorbike there? No, because the road is fine, smooth. Look at other roads. You use your car on these bad roads, you over labour the car, you over labour yourself.
Queries number of auto assembly companies
How can Nigeria licence up to 54 motor assemblers, how many brands of vehicles do we have in Nigeria. Abroad, how many auto makers does Germany have, Japan? The intention is good to industrialise Nigeria automobile wise, but we must get back to the basics.
On the African Continental Free Trade Agreement (AfCFTA)
We have to adjust to what is obtainable now. I know the President considered many things before signing the agreement. We need to wake up also.
If we are serious, we can produce more than 50% of local content for motorcycle.
Nigeria has what it takes to produce and meet international standards, but politics. OEMs have been discouraged to come because of the bureaucracy in government.
Motorcycle industry second largest employer of labour in Nigeria
Okada has become a means of livelihood in Nigeria. The motorcycle industry employees over one million persons. Motorcycle is the second highest employer of labour, second only to agriculture.
