Investment Opportunities

• Manufacture of vehicles ,especially low cost utility vehicles to serve the rural dwellers
• Manufacture of auto components and spares
• Manufacture of motorcycles and bicycles especially as government's target of 50% and 100%local content for motorcycle and bicycle respectively is yet to be met.

Investment Incentives

In addition to the general investment incentives available to investors, there are specific incentives for the automotive industry as described below:

• Import duty for CKD for vehicle assembly is 2.5% while that of fully built up units is 30%
• The Nigerian government has mandated all its ministry, agencies and parastatals to patronize the products of local automotive assembly plants.
• The national automotive council has established an auto development fund to provide soft loan for companies that will produce auto parts.
• Automotive industry has the status of a pioneer industry. Pioneer status takes the form of a 5-year tax holiday anywhere in the country, and a 7-year holiday in any economically disadvantaged local government area;
• Up to 120% local expenses of R& D is tax deductible, for R&D on local raw materials, 140% is allowed.
• Industrial establishments that have implant training facilities enjoy a 2% tax concession for a period of 5 years.
• 20% of investments in infrastructure, (roads, water, and electricity) are tax deductable.
• Industries in economically disadvantaged areas would have an additional 5% capital depreciation allowance over and above the initial allowance.
• Industries with high labour to capital ratio are entitled to the following concession: those employing 1000 persons will enjoy 15% tax concession, those employing 200 or more will enjoy a 7% tax concession and finally those employing 100 persons or more have a 6% tax concession;
• Engineering industry with high local value added will enjoy a 10% tax concession for 10 years
• Expenses incurred on expansion, modernization and/other diversification will attract allowances; and
• Engineering industry with up to 60% local raw materials utilization will attract 20% tax credit for 5 years
• The government recently established a Bank of Industry to provide long term loans to industrial projects.