Controversy Trails President Tinubu Government’s N200bn Auto Loan

Controversy has trailed President Tinubu Government’s N200bn Auto Loan.

 

NewsOnline Nigeria reports that controversy has continued to trail the status of the N200 billion federal government’s Automotive Development Fund (ADF) as auto manufacturers and the National Automotive Design and Development Council (NADDC) have disagreed on its disbursement.

 

ADF is a specialised fund designed to support the automotive industry in two key areas, which include Auto Finance that provides financial assistance for auto-related projects, enabling companies to upgrade and expand their facilities by applying for disbursement from the Bank of Industry (BOI) to access the funds. The other aspect is the Auto Credit Scheme, which aims to ease the acquisition of locally manufactured motors by Nigerians.

ALSO: Former VP Osinbajo Breaks Silence, Reveals How Nigeria Can Rise Again

The NADDC-ADF is generated from a 35 per cent levy on imported fully built passenger vehicles, which was introduced by the government about 10 years ago and, based on calculations, the fund should have accumulated to at least N200 billion.

 

Currently, however, there is confusion over the status of the loan as manufacturers informed LEADERSHIP that the loan has been suspended while NADDC stated that it is still active and running.

 

Disclosing the status of the suspension to newsmen, the managing director, PAN Nigeria Ltd., Taiwo Oluleye, said the loan has been suspended.

 

Oluleye, who is also the chairman of the Nigeria Automotive Manufacturers Association (NAMA), disclosed the association’s position in a communiqué issued after the Nigeria Auto Industry Summit (NAISU).

The summit, according to her, was organised by the Nigeria Auto Journalists Association (NAJA) in conjunction with the National Automotive Design and Development Council (NADDC).

 

The position, she said, is for the federal government to incorporate a provision compelling Ministries, Departments, and Agencies (MDAs) to buy made-in-Nigeria vehicles in the National Auto Industry Development Plan (NAIDP) Bill as well as to expedite action towards assenting to the NAIDP Bill, also known as Auto Policy, to hasten the sector’s development.

 

Oluleye, who stated that the loan had been suspended, did not reveal the time or what led to the suspension of the loan.

 

On its part, the NADDC, however, maintained that the loan is still active and that many manufacturers are applying for it. The ADF loan has not been suspended, said a staff of NADDC, Irene Caleb, whose name was obtained through the Trucaller app, as she never gave a chance to ask for her identity. ‘We are still processing applications that would allow eligible manufacturers to get access to loans,’ she said.

 

When asked further how much and how many companies have been able to apply for the loan, the NADDC staff said: “I don’t know what you want to do with the information you are asking me. I have just told you that the loan is still on, and people are applying for it. I have put the phone on speaker, and people are listening so that they can bear me witness. I just told you that the loan is still on and people are still obtaining forms,” she stated and hung up the phone on our reporter.

 

Thereafter, several calls to her phone were not responded to at the time of filing the report.

 

However, the chairman, Automobile and Allied Sector, Lagos Chamber of Commerce and Industry (LCCI), Mr Kunle Jaiyesimi, expressed concern at the NADDC’s claims that manufacturers were accessing the loan.

 

He said: “They said they have been disbursing and the loan is still on? But who have they been disbursing to? Because the last time we checked with the Bank of Industry, they said they do not have any NADDC loans.”

 

Jaiyesimi, who is also deputy managing director of CFAO Mobility, said, ‘We have not seen any evidence of disbursement recently, the intervention fund should be worth over N200 billion.’

 

Speaking further, he said, about six years ago, he approached BOI for the loan but to no avail.

 

“I approached NADDC and got the form filled out. But getting to BOI, they said the loan was not available. It seems like the loan is reserved for a select few. As members of the automobile sector of LCCI, we have not benefited.

 

“As you know, the loan is in two parts: one for auto manufacturers, and the other is a kind of loan scheme where consumers can select a vehicle and receive an invoice, which the auto dealer can then use to facilitate a loan from one of the banks partnering with NADDC. This streamlined process makes it easier for consumers to access financing and drive away in their new vehicles.”

 

According to him, “In other climes, what we see is a situation whereby you drop the equity contribution of maybe 20 or 30 per cent, then this loan should be readily available to cover the balance, and the repayment can be over four or five years. So with that, you create a lot of leverage for people to come in and patronise locally assembled vehicles.

 

“You create room for people to own new vehicles rather than relying on accident-related vehicles that are coming from Europe, and by doing this, it will increase the volume of sales within the industry. So, this has not been the case. So, if they (NADDC) are saying people are benefiting, they should let us know who is benefiting.”

 

Jaiyesinmi suggested that local manufacturers should explore options through the National Automobile Manufacturers Association (NAMA), which would assist its members in resolving issues like accessing the NADDC fund.

 

As a close affiliate, he said, NAMA can help members navigate the complex application process, avoiding individual trips to Abuja and multiple government agencies.

 

By doing so, he added, NAMA can boost members’ confidence and achieve the fund’s objective of supporting automobile assembly projects.