15 Jan

Daily Watch – Innoson sheds jobs, Vehicle imports drop 67%

  • Nigeria’s first fully indigenous vehicle manufacturing company, Innoson Vehicle Manufacturing, has laid off about 50 percent of its work force. A change in government policy, the high cost of the American dollar, and difficulties in procuring foreign exchange for imported vehicle components are some of the reasons attributed for the dwindling fortunes of the company. Innoson got plenty of patronage under both the governments of Goodluck Jonathan and Peter Obi, but the current governor of Anambra state, Willie Obiano, prefers to import vehicles from the USA and elsewhere, while the new federal government has not made any policies regarding the purchase of locally manufactured vehicles.
  • Meanwhile, the combined effect of 70 percent tax on fully built cars (FBUs) comprising a 35 percent duty element and 35 percent levy, unfavourable exchange rate of the naira to the dollar and volatility in global oil prices have resulted in an economic slowdown in Nigeria, adversely affecting the country’s big spenders on new vehicles. Imports of new premium luxury cars and basic models in Nigeria went down from 45,618 units between January and December 2014 to an estimated 15,031 units towards the last quarter of 2015. The wide gap represents a 67 percent drop in the total number of vehicles sold in the country; a situation made worse by the absence of a single digit or convenient double digit interest auto consumer credit financing mode.
  • Justice Ibrahim Buba of the Federal High Court in Lagos has issued a warrant for the arrest of a former Niger Delta militant, Government Ekpemupolo, AKA Tompolo. The Judge said the warrant had to be issued after Mr. Ekpemupolo failed to respond to invitations to appear before the court. The Economic and Financial Crimes Commission, EFCC, is accusing Tompolo of corruption.