I recall the experience a friend had with one vendor of second-hand clothes years ago. My friend had been in the unemployment market for a while after graduating from university in the mid-1980s, so he naturally could not afford brand new shirts.
On a fateful day, he had stormed Broad Street, in Central Lagos, with his limited funds. At that time, Broad Street was famous for anything Tokunbo (the name given to imported second-hand goods). Dresses, shoes, handbags, electronics, furniture, everything, you’ll get in that part of the city. Even, if you wanted a Tokunbo human being, I’ll wager that you could get at Broad Street.
My friend made a triumphant entry to our one bedroom apartment that afternoon, brandishing shirts and socks he had purchased at rock bottom prices. He even boasted about his own abilities to haggle, which fetched him all the purchases for next to nothing.
The next day, he ‘knacked’ one of the shirts, and went out job-hunting. In the course of his odyssey, he passed through Broad Street. He then heard someone shouting: “Ah, my friend. You don knack the thing. E fit you well o.” It turned out to be the clothes seller, who had recognised the shirt he sold the previous day.
Did my friend embrace the vendor? They say you don’t count the fingers of a man who has nine in his presence. It was bad enough that a graduate of many years had gone to buy Tokunbo shirts at Broad Street. To now fraternize with the seller on the road in broad daylight was like sacrilege. So as the man hailed, my friend increased his pace. He made himself scarce within seconds, before anybody would see him frolicking with a dealer in used clothes.
My friend had that experience in the mid-1980s, before Nigeria got completely overrun by the Tokunbo phenomenon. Few years later, second-hand items became something to glory in, as you were some sort of royalty if you could even afford such. It was an era in which brand new cars became a rarity on our roads, and turned the exclusive preserve of the wealthy, and those in government. Majority of the citizens had no option than to opt for Tokunbo cars, which the sellers graded according to age and utility value. If a used car was just about 15 years old, and had a mileage of about 100,000 kilometres, it was Grade A. If it was 20 years, and had chalked up about 200,000 kilometres on the mileage, it was Grade B. And so on, and so forth! All sorts of vehicles found accommodation on Nigerian roads, some smoking like chimneys, others looking like something the cat dragged in. But Nigerians rejoiced in their ‘good’ fortunes at being able to buy the cars, no matter the age. The author, Nkem Nwankwo, had written a book in the mid -70s, with the title, ‘My Mercedes is Bigger than Yours.’ For Nigerians, it was a case of My Tokunbo is Newer than Yours. It was a complete devaluation of the taste and desires of the average person. You could see a big party in process, and enquiries would tell you that somebody was ‘washing’ a 25-year-old Tokunbo car, which he just bought. Cry thy beloved country!
Recently, however, the Federal Government tried to salvage whatever remained of the honour and taste of Nigerians, when it came out with the Automotive Industrial Policy Development Plan. What are the details?
According to Minister of Information, Labaran Maku, supported by two of his colleagues, Olusegun Aganga (Trade and Investments) and Bala Mahammed (Federal Capital Territory), the Federal Executive Council had approved a broad policy plan to develop the country’s automotive industry.
Maku added: “The plan, which is part of the industrial revolution plan that had earlier been approved, is aimed at ensuring increased flow of investments for the development of the automotive industry in Nigeria.”
Other details of the new policy included the designation of automotive clusters in Lagos/Ogun, Kaduna/Kano, and Anambra/Enugu states, increase of tariffs on Tokunbo vehicles as a means of protecting the burgeoning local industry, and the patronage of local assembly plants by government, unless the brand was specialized, and not produced in Nigeria.
Originally, the new policy was interpreted as a ban on Tokunbo vehicles. But government clarified that it was only a protection of local capacities through the adjustment of tariffs on imported vehicles.
What are the other highlights and expected gains of the new policy? It would revive and expand the petrochemical and metal/steel sectors, and facilitate the return of tyre manufacturing industry. Recall that Dunlop and Michelin had exited the Nigerian scene a number of years ago, due to the harsh operating climate, even preferring nearby Ghana to us.
A transformed automotive industry would generate about 700,000 direct and indirect jobs, and save the country about N900 billion spent yearly since 2008 to import about 70,000 new and 200,000 used vehicles.
Under the new policy, according to Maku, “banks will be encouraged to operate vehicle purchase schemes to enable Nigerians purchase cars on easy terms, and the FRSC will kick off a new vehicle registration/tracking system to check the smuggling of used cars into the country.”
Again, it was disclosed that foreign car manufacturing giants like Toyota and Nissan, are soon to announce specific investments in Nigeria, while the Industrial Training Fund (ITF) will work with car manufacturers, Cena of Brazil, to open automotive training centres.
Equally, two universities will start degree programmes in auto-mechanical engineering, to provide adequate local manpower for the industry. Brand new cars may start selling for as low as N1.5 million.
Good policy layout by the government. But it is not exactly new. The 1970s had seen similar initiatives, which eventually ended up in smoke. In that epoch, assembly plants had been set-up by Peugeot, Volkswagen, Steyr, Leylands, and Anambra Motor Manufacturing Company (ANAMMCO). Today, perhaps only Peugeot Automobile of Nigeria (PAN) is still in active operation, and from capacity utilization of 90% in 1981, it now records a mere 10%. Staff strength has whittled down from about 5,000 to a couple of hundreds.
What were some of the ills that plagued, and almost killed the automotive industry in the country? Simple. They were the same troubles that beset the larger economy.
Lack of power supply, for instance. How can auto assembly plants operate efficiently without supply of power? At a point, PAN invested N800 million on power generating sets, thus eroding its own profit margin significantly. And of course, the cost would be passed off on the final products, thus making them out of reach of average Nigerians.
When tyre companies pulled out of the Nigerian market, PAN, for example, was compelled to import tyres for its products. Manufacturers of other components used in vehicles also closed shop. These included makers of exhaust systems, batteries, seat frames, tubes, radiators, brake pad/linings, windscreens, mirrors etc. There was lack of access to long term and low interest funds, there was inadequate manpower, and the sector went inevitably down. The final nail was driven into the coffin by the Tokunbo syndrome, guzzling scarce foreign exchange. According to Aganga, $3.4 billion (550 billion) was spent importing cars in 2012, and $4.2 billion (N670 billion) spent in 2010, thus making vehicle import the highest consumer of foreign exchange.
Nigeria usually learns nothing, and forgets nothing. What therefore, is the guarantee that the new, automotive policy will be different from initiatives of the past? And is it not putting the cart before the horse to hike tariff on imported cars, when local capacities have not even been attained? These are posers for the government to tackle.
The Automotive Industrial Policy Development Plan is good and laudable. The will to implement it, and policy consistency overtime, is what is now needed. If the government gets it done, then it is one up for the Goodluck Jonathan administration. But if it messes it up, it will be typically Nigerian again. However, industrialization will be a mere mirage if our assembling and manufacturing plants are not helped to flourish, and protected from the ravages of unfettered importation as represented by the Tokunbo phenomenon.