Autos Production Adds To Diversification
As the re-calculating of Nigeria's GDP throws light on the diverse industries contributing to the economy, the roll-out of the first Nigerian-built Nissan Patrol emphasises the rise of manufacturing. Although intended to cut down on the country's considerable vehicle import bill, BMI sees the new Nigerian Automotive Industrial Development Plan (NAIDP) as a natural expansion of the manufacturing sector, which actually makes up a much bigger share of GDP than first estimated, at 6.8% of GDP in 2013, compared with the 1.9% shown in the old data ( see 'Larger, More Diversified Economy To Continue Robust Growth', April 9).
Although there has been vehicle assembly in Nigeria before, a lack of clear-cut policy and support for domestic manufacturing saw output collapse from 2003 onward with just a small number of low-volume operations still active. In this respect, the implementation of the new industry policy and the positive take-up by automakers can be seen as the real starting point for a national vehicle production industry.
That said, the previous wave of production in the country informed our view that the remaining few assemblers with facilities in the country would capitalise on the speed with which carmakers have sought to set up production operations. Nissan's partner Stallion Group is a prime example, partnering not only the Japanese firm but also Indian commercial vehicle manufacturer Ashok Leyland and South Korea's Hyundai Motor. This relationship has enabled Nissan to get its first model to market just seven months after the NAIDP was announced.
|Manufacturing On The Rise|
|Nigeria - Contribution Of Total Manufacturing To GDP (%)|