Nigeria’s Car Market Gets A Boost: Auto Finance Scheme Promises Relief, But Faces Tough Criticism

Nigeria’s Car Market Gets A Boost: Auto Finance Scheme Promises Relief, But Faces Tough Criticism

The announcement of a N20bn consumer credit fund by Creditcorp to stimulate the purchase of locally assembled vehicles has sparked mixed reactions from stakeholders in Nigeria’s automotive sector. While the initiative is welcomed by some as a step in the right direction,…Nigeria’s Car Market Gets A Boost: Auto Finance Scheme Promises Relief, But Faces Tough Criticism

many believe it is insufficient and long overdue.

The N20bn fund, which was launched in partnership with the National Automotive Design and Development Council (NADDC), is designed to offer single-digit loans to buyers of brand-new vehicles. The goal is to increase demand for locally manufactured vehicles, which has significantly dwindled due to high prices and the preference for used cars.

However, stakeholders argue that the amount allocated, when divided by the average price of a locally assembled vehicle, can only fund the purchase of around 600 cars. The fund could barely cover a fraction of the demand, given that prices of vehicles from brands like Innoson Vehicle Manufacturing (IVM) range from N25m to N35m, with some models even reaching up to N100m.

A Decade of Decline: Is It Too Late for Nigeria’s Auto Industry?

The N20bn scheme was meant to rejuvenate the Nigerian Automotive Industry Development Plan (NAIDP), which has struggled since its inception over a decade ago. While there were once over 50 indigenous vehicle assemblers in the country, only a handful remain operational, many working at extremely low capacity.

Mr. Kunle Jaiyesinmi, Deputy Managing Director of CFAO Motors, expressed cautious optimism, stating that while the fund is a positive development, it comes too late. “This scheme is belated,” he said, pointing out that the government’s auto policy had promised more support much earlier. He emphasized that the auto financing portion of the tariff collected from the importation of fully built vehicles should have been used to support the industry much sooner.

A Small Seed: Can the N20bn Grow the Industry?

Despite the criticisms, some experts believe the N20bn fund represents a start in the right direction. Mr. Luqman Mamudu, former Director of Planning at NADDC, noted that while the sum is modest, it serves as a commitment to the Nigerian automotive development agenda. He explained that the fund was meant to attract further investments from Development Finance Institutions (DFIs), Nigerian commercial banks, and other stakeholders in the sector.

Automotive consultant Dr. Oscar Odiboh sees the initiative as a move toward greater competition in the sector, which could reduce the cost of auto ownership and make vehicles more accessible to Nigerians.

Looking Ahead: Will the N20bn Fund Be Enough to Revive Local Manufacturing?

The ultimate question remains: will this N20bn fund be enough to kickstart the automotive sector’s recovery, or is it just a drop in the ocean for an industry in desperate need of more robust support?

As Nigeria continues to adjust to the post-subsidy economy, the automotive industry will need more than a symbolic financial gesture—it will require substantial, sustained investment to restore it to its former potential and provide jobs, stimulate local manufacturing, and reduce Nigeria’s dependency on imported vehicles.

For More Information And News Update, Join Ireporteronline WhatsApp Channel With Link Below: https://whatsapp.com/channel/0029VaV4jB6DuMRgwqnJCF32 For advertisement inquiries only, kindly send a message to 09010649814 on Whatsapp