The federal government has signed a Memorandum of Understanding (MoU) with Volkswagen group to develop an automotive hub in Nigeria, the Federal Ministry of Trade and Investment (FMITI) has said.

The statement sent to PREMIUM TIMES, Monday, signed by the Strategy and Communications Adviser FMITI, Bisi Daniels, showed that the MoU was signed by the Minister Industry Trade and Investment, Okechukwu Enelamah, for Nigeria and Thomas Schaefer, the Head of the Sub-Saharan Region of Volkswagen, on behalf of the Group.

According to the terms of the MoU, Volkswagen said it accepts to implement a phased approach in relation to the assembly of vehicles, initially from assembly kits with the long-term view of establishing Nigeria as an automotive hub on the West Coast of Africa.

This, the statement added, will include establishing a training academy in conjunction with the German Government, which will train the initial employees. The academy will also provide broader technical training in automotive skills.

Volkswagen also proposed that a comprehensive Volkswagen vehicle and service network be developed in the country subject to commercial viability.

In turn, the Nigerian government will finalise the approval of the Nigerian Automotive Policy (NAP) currently under consideration. The policy includes the gradual transition from the importation of used cars to the manufacture and distribution of new passenger vehicles.

The government has committed to providing a conducive legislative environment that will encourage the manufacturing of motor vehicles in Nigeria, the statement showed.

Mr Enelamah said the MoU is a major step in the country’s walk towards the development of a robust automotive industry to achieve its potential contribution to the continuous economic development.

“We believe in the strategic and catalytic role of the automotive industry in the diversification of the Nigerian economy and we remain committed to encouraging and partnering with relevant stakeholders, especially investors and friends of Nigeria.

”We will meet our commitments and look forward to welcoming other Original Equipment Manufacturers (OEMs) interested in working with us to increase local production, local procurement, and exports,” he added.

The Director General of the National Automotive Design and Development Council (NADDC), Jelani Aliyu, reportedly said, “As Africa’s largest economy and most populous country, Nigeria offers not only a significant domestic market, but also the opportunity of a gateway to the West African market. We are pleased by the progress we have made in our engagement with Volkswagen, and excited to be partnering with a strong stakeholder with a full understanding of the huge potential Nigeria represents.

“This week, Volkswagen has been able to demonstrate with conviction that it is serious about its intentions in Sub–Saharan Africa. We are well placed to become a dominant player in Africa, as the continent continues to stabilise and develop economically, as the last frontier for the automotive industry.”

Volkswagen has a fully-fledged manufacturing facility in South Africa, and assembles for vehicles in Kenya, Algeria as well as in Rwanda.

Meanwhile, Mr Daniels added that the national automotive policy has continued to attract investment from within and outside the country.

“Recently, a delegation of international automotive investors, comprising original equipment manufacturers and other stakeholders visited the country.

“Among others, they sought to: gain insight into the opening business opportunities and investment environment in the Nigerian automotive sector; assist in the shaping of national and state policy to support industry overall and domesticated manufacturing for the automotive sector and gain insight into the automotive sector & potential for enhanced manufacturing in Nigeria.

“They also sought tp build relationships and networks with key Government and private sector figures; and to deepen the structured business links and investment between the private sectors of Nigeria and South Africa,” he said.