On Monday President Muhammadu Buhari disclosed that all Ministries, Departments and Agencies (MDAs) to buy only vehicles made or assembled in Nigeria during the 26th Economic summit held in Abuja, represented by the Vice President Prof. Yemi Osinbajo, a day after President Muhammadu Buhari inaugurated 283 locally assembled vehicles purchased by the Federal Road Safety Corps to boost its operations nationwide. Daily Time gathers.
The vehicles, which included patrol cars, rescue buses and tow trucks, were supplied by Innoson Vehicle Manufacturing Company Limited, Peugeot Automobile Nigeria Limited.
The Federal Government may have directed its Ministries, Departments and Agencies to henceforth patronize local auto assembly plants for their vehicle needs as a way to improve the nation’s economy and also keep the industry running. And he also said that the policy to patronize local auto makers is to segregate them from the policy tthat seeks to drop Import duties.
“With subsidy removal and the increase in fuel price and the pass-through to food prices, transportation costs had to be reduced. Now the automotive policy is directed at localizing the production of vehicles. So the logic was to increase the duty and levies so that local production becomes more competitive. But the annual demand for vehicles is about 720, 000 vehicles per year. Actual local production is 14,000 vehicles a year.
“We are not giving up on the local auto industry. We still have relatively high duty at 35%, so there is still a disincentive for importation. Secondly, we are promoting policy that the government must buy only locally manufactured cars,” the President said.
The president said it is in order to reduce the impact of inflation on Nigerians through tax exemption to minimum income earners.
“We are proposing in the new Finance Act that those who earn minimum wage should be exempted from paying income tax.
“These provisions which complement the tax breaks given to small businesses last year will not only further stimulate the economy, but are also a fulfilment of promises made to take steps to help reduce the cost of transportation and the impact of inflation on ordinary Nigerians.”