BOI lists financing options for auto industry
Stories by Sola Fadare, Lagos
Charles Ugwu, Minister of Commerce
In its bid to revitalise the
automotive industry, the
Bank of Industry (BOI) has rolled out different ways through which the sector can be funded. In a paper presented in Lagos recently on the “Revival of the Auto Industry in Nigeria : The Investment Option”, the Managing Director/ Chief Executive Officer,, BOI, Ms Evelyn Oputu said the sector was capable of being a strong contributor to the economy if the stakeholders could take a cue from its funding operations in other countries. Citing Japan and South Korea as examples, Oputu observed that mechanisms used by the Japanese government to affect the economy typically included a broad range of trade protection measures subsidies; “de jure and de facto” exemptions from antitrust statutes, labour market adjustments, and industry-specific assistance to enhance the use of new technology,
The BOI boss said further importation of completed cars was initially restricted in South Korea but the acquisition of foreign parts was later encouraged by providing duty free imports of automobile parts for domestic producers, adding that “to further encourage domestic innovation and production of automotive products, the government then allocated subsidies to auto parts producers and secondly, by encouraging domestic firms to enter into joint ventures with international partners in order to acquire technological know how.”
Oputu also added that venture capital, equity, loans and foreign direct investment were other options through which the sector could be financed. She noted that in Nigeria, there were a number of venture capital funds such as ARM, First Funds and Unic ventures, stressing that that using equity would be most favourable as the Nigerian capital market had shown that it had “great appetite for funds” having grown the public offerings on the floor from N68.6bn to N262.8bn in the last five years.
Speaking on how loan could be used to finance the sector, Oputu said in the light of the banking consolidation that occurred and still going on which would hopefully be the beginning of a period of good macro economic conditions which should lead to lower interest rates regime, it then “bodes well for the industry because the banks are now looking international sources of financing such as multilateral agencies which also lend at more attractive rates which wopuld propel the industry forward.
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NITOA to lose $3 million
By Adetunji Adeleye
The Nigeria Trawler
Owners Association
(NITOA) has expressed fears that its members might incur a loss of $3 million in the first quarter of this year.
The Vice President, NITOA, Mrs Margaret Oyema Orakwusi disclosed to newsmen in Lagos over the weekendthat the amount represents what her members would pay as duties on shrimps exports to Europe.
She said Federal Government's refusal to endorse the European Partnership Agreement (EPA) would bring about the loss.
``The endorsement of EPA by the Federal Government would have protected fishery sector from paying duty fees on their exports,'' he said.
According to her, European Union, years back introduced the law which stipulates duty fees ranging between 4.2 per cent and 6.1 per cent on importation of fish and shrimps from Nigeria. She decried that sales price of Nigerian fisheries products and shrimps would be discounted against similar products from Ghana , Cote d'Ivoire and Cameroon .
Orakwusi appreciated government's resolve toprotect the local industries but said the non-signing of the agreement would have a serious effect on the processing sector.
The association appealed to the government to cushion the harsh effects of its refusal to sign the EPA by restoring the payment of Export Expansion Grants (EEG), ensure direct allocation of diesel to it’s members and proper monitory of the nation’s territorial water.
According to her, others issues threatening the industry is the incessant attacks on the vessel crew members at the high sea.
We have lost 10
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