The recent Memorandum of Understanding (MoU) signed between the Urban Development Bank of Nigeria (UDBN) and the Trade Union Congress (TUC), for the importation of no fewer than 150 mass transit buses from China, has drawn the ire of stakeholders in the local automotive industry, some of whom have branded the deal an economic sabotage that should be halted immediately.



They argue that such a huge patronage which does not come very often, should have been channeled inwards to the benefit of the groaning vehicle manufacturers and the economy gnrally.

The N2.3 billion loan agreement which was signed last week at UDBN’s headquarters in Abuja, was part of a total tranche of about N5 billion approved for both the TUC and the Nigeria Labour Congress (NLC) by the bank from its Public Mass Transit Revolving Fund which commenced last year.

While the TUC, through its President, Peter Esele, had disclosed at the ceremony that the buses for intra- and inter-state transportation, were already being built in China by an un-named Chinese company, no indications have so far emerged on the brands or origins of the vehicles the NLC plans to procure for the its own scheme.
However, the deal has been causing ripples in the auto industry where the manufacturers’ association, the individual auto plants and other stakeholders, have decried the resort to importation, even when there are vehicle plants in the country with more than enough capacities to meet the nation’s bus needs, but are barely surviving due to lack of patronage.

Reacting to the development, the Nigerian Automotive Manufacturers Association, NAMA (a body of auto manufacturers in the country), said none of its member-companies were contacted for bids or quotations before the unions and the bank opted to import the vehicles from China. Disclosing that he was yet to recover from the shock the “very bad news” gave him, NAMA Executive Director, Arthur Madueke said the unjustifiable resort to importation by the TUC and NLC would have no impact on the economy. He added, however, that if local manufacturers had been challenged with the order, it would have gone a long way in revving up activities in their plants, with tremendous multiplier effects on employment, capacity utilization, reduction in youth restiveness and halt capital flight.

He, therefore, called on President Goodluck Jonathan to intervene and ensure that the procurement is channeled inwards, in line with a Federal Government gazette issued in April this year which compels all government orders to be placed locally. Apart from the new Innoson Vehicle Manufacturing Company Limited (IVM), Nnewi, Anambra State, which impressed President Goodluck Jonathan with its array of sundry buses (mini, midi, intra-city and inert-city) being produced when he commissioned the plant exactly one year ago (on Friday, October 15, 2010), there are other domestic auto plants that also make buses in the country.

However, due to lack of patronage, some of them produce only upon receiving specific orders which rarely come their way these days. Contacted on phone early in the week, the Chairman of Innoson Group, Chief Innocent Chukwuma, confirmed that no effort was made by the labour leaders or their representatives to contact his Nnewi plant to build the buses. “There is no type of bus, whether for city shuttles or longer distance transportation, that we cannot build at IVM. And individual transporters and state governments that have purchased our buses are satisfied with their performance. So, why go abroad?”

The Managing Director of National Trucks Manufacturers, Ibrahim Bayero, whose company displayed a wide range of buses at the 13th Abuja International Motor Fair that ends this weekend, told Daily Sun Motoring that the N5 billion would have made a lot of impact on Nigeria’s comatose auto industry and beyond, because of the possibility to revive several local parts manufacturing firms in the country which would have supplied the needed local content.

This explains why a media consultant and auto industry watcher, Alfred Nwosu, also argued that if allowed to succeed, the planned importation of buses by TUC and NLC, would amount to a lost opportunity to buoy up the ailing local auto industry and a huge boost to the economy of China where the vehicles will come from.
He recalled that the government of President Jonathan has always trumpeted the ‘Buy Made-in-Nigeria’ slogan, which was echoed when he opened Innoson plant in Nnewi, adding that this is the time to prove that he actually meant what he has been preaching.

Nwosu remarked: “It dose not matter if the procurement is not directly by government or any of its ministries or agencies. Urban Deveopment Bank is a government creation and the revolving fund is tax payers’. So, tax payers’ money should not be wasted abroad. Can you imagine what an order for 150 mass transit buses can do for a young plant like Innoson, which has produced similar rugged vehicles for some state governments with strong after-sales support?”

Nwosu and Madueke agreed with those who described the importation of the buses as an economic sabotage, and urged the Federal Government to treat it as such. But, Ibrahim Bayero, believes it is worse than sabotage: “Perhaps, I should say that it is like signing the death sentence for the vehicle assembly industry in the country…It is disappointing and disheartening to receive the news that the TUC is part of the unemployment situation we are facing in the country today”.

He said it is an irony that the trade unions which draw their affiliate components from the auto industry would take an action that would hurt some of their members. “At National Trucks Manufacturers, our workers are members of SEWUN (Steel & Engineering Workers Union), a part of the NLC.They pay their monthly dues to the Union and our company sponsors their executives yearly for seminars / conferences etc. Yet with all the ‘talk’ from the NLC & SEWUN leadership, the workers in NTM are ‘stabbed’ in the back”.
According to him, TUC and NLC exhibited high level of insensitivity by being fully aware of the capacities of the plants and the struggles that have been part of their existence over the years, “and yet they take 5 billion naira out of Nigeria to create jobs in another country”.

Bayero said though the Federal Government is not directly involved in the procurement, “my fear is that they would get the blame. So, I can say the development is not good for the image of the government”.
Madueke who hinted that the auto makers in the country would formally take their protests to the Presidency, Ministry of State for Industry, the National Automotive Council and the Bureau for Public Procurement, faulted the excuse by some labour leaders that workers in some plants in the country do not belong to affiliated unions, arguing “the plants where the buses are to be produced in China, do their workers belong to NLC or TUC in Nigeria?”

NLC and TUC were also advised remember what happened some years back when hundreds of Tata buses were imported into the country, but they quickly ended in the junk yards, due the not-to-high quality of the vehicles, lack of adequate after-sales support and unavailability of replacement parts.