The Nigerian government is set to transform the auto spare parts sector into a key driver of economic growth, with projections indicating potential annual revenues of between $500 million and $900 million. This ambitious initiative is part of a broader strategy to enhance local manufacturing and reduce reliance on imports.
Currently, Nigeria’s automotive industry is heavily dependent on imported spare parts, with local manufacturing remaining minimal. This contrasts with Africa’s automotive landscape, where Tunisia, for example, is making significant strides. Tunisia is the continent’s second-largest exporter of auto parts, trailing only Morocco. The North African country is home to around 280 auto industry firms and is on track to double its exports to $4.7 billion by 2027, aiming to create 150,000 new jobs.
Ifeanyichukwu Agwu, CEO of BKG Exhibitions, emphasised the need for Nigeria to follow suit by initiating local manufacturing of auto parts. “To become a leading auto hub in Africa, we must start producing auto parts locally,” Agwu said. He pointed out that while assembling entire vehicles is complex, manufacturing spare parts is less so, suggesting that such a shift could create numerous job opportunities.
The president of the Ladipo Central Executive Committee of the Auto Dealers Association, Mr. Africanus Ogudoro, echoed Agwu’s sentiment, highlighting that local production could reduce import dependence, save foreign exchange, and bolster the domestic automotive industry.
A board member of the Nigeria Automobile Manufacturers Association (NAMA), Benedeth Ejindu, noted the abundant resources available in Nigeria for automotive production, including leather, textiles, rubber, iron, steel, and materials for electric vehicles like cobalt and lithium. These resources make Nigeria a viable location for expanding its automotive manufacturing sector.
The National Automotive Design and Development Council (NADDC) is taking significant steps to harness this potential. Joseph Osanipin, the Director General of NADDC, revealed plans to focus on local part manufacturing and highlighted ongoing discussions with stakeholders.
He said NADDC is facilitating the establishment of the Nnewi Auto Industrial Park in Anambra State, funded by the African Export-Import Bank (Afreximbank). This park aims to centralise the manufacturing and assembly of automotive components, thereby reducing costs, improving price competitiveness, and ensuring product standardisation.
Additionally, NADDC is working on completing a component test center in Enugu, which will ensure that products meet international standards before mass production.