FG earmarks N200 billion for vehicle financing scheme, moves to provide single-digit interest rate
The Federal Government through the National Automotive Design and Development Council (NADDC) has announced that it has floated a N200 billion vehicle financing scheme.
This is to allow Nigerians own vehicles without necessarily paying for them as it is done in other developed countries.
According to NAN, this was made known on Sunday in Sokoto by the Director-General of NADDC, Alhaji Jelani Aliyu, when he addressed newsmen on efforts of the council to discourage the massive importation of used vehicles into Nigeria.
What the Director-General of NADDC is saying
Aliyu in his address said, “It is one thing to produce a vehicle and it is another thing to sell it, especially in this environment we live in Nigeria.
“We know that the purchasing power of the average Nigerian is very low. Around the world, people have been earning more and more relatively, but in Nigeria, the market forces have made it so that Nigerians actually earn less.
“What an average worker, at a particular grade level, let’s say in a Ministry in 1975, could buy with his salary, that same officer now is unable to do that.
“This is because of inflation and what happened to our economy, as global market forces determine the prices of vehicles, just like crude oil, gold and diamonds.”
Average Nigerians unable to buy new vehicles
The NADDC boss lamented that overtime, the average Nigerian has become unable to buy a brand new vehicle like they used to do in the 1970s and 1980s, adding that in other places around the world, people get new vehicles on credit by putting in 5 or 10 per cent of their costs.
He said, “Then you take the vehicle home and you pay over a period of 4, 5 or 6 years. In Nigeria, that is basically non-existent and we want to change that.
“If you want a new vehicle, you are expected to put all the money down before you drive it home.
“So, people are unable to buy these new cars.’’
NADDC to partner banks to provide single-digit auto financing
Going further, Aliyu pointed out that the council is discussing with the Central Bank of Nigeria (CBN), Jaiz, Wema and Zenith Banks to provide a single-digit auto financing, to assist Nigerians to buy Made-in-Nigeria vehicles.
He said, “We are hoping to get the necessary approval so that Nigerians can just put down 10 per cent and take a brand new vehicle home and you pay the remaining debt over 4, 5 or 6 years.
“We believe this will help Nigerians to buy these vehicles and we have as part of our budget, some money for this.”
What you should know
- Recall that in February 2021, the Federal Government announced plans to launch a Vehicle Finance Scheme that would help Nigerians own new cars.
- This was part of the 5-point comprehensive programme of the National Automotive Industry Development Plan (NAIDP) which is aimed at promoting local production of vehicles and their parts.
- The Nigerian Automotive Industry Development Plan (NAIDP) provides for incentives which are targeted at creating an environment for existing assembly plants to thrive and attracting new investors in the sector.
- The 5-point NAIDP programme covered investment promotion, infrastructural development, improvement of standard and skills as well as market development.
- The NADDC was formed by Act no. 83 of 30th May 2014 from the merger of the National Automotive Council and the Centre for Automotive Design and Development as a Parastatal of the Federal Ministry of Industry, Trade and Investment.
- The mission is to design and implement policies, programmes and strategies for an effective, competitive and diversified private sector-led industrialisation process, with plans to create an enabling environment for the manufacture of Nigerian made vehicles of international standards at competitive prices using local human and material resources.