Auto sector gets 2 per cent reduction on NADDC loans as palliatives

As part of efforts to curtail the coronavirus pandemic, the Federal Government through the National Automotive Design and Development Council (NADDC) has rolled out a stimulus package for the local automotive industry.

The Director-General of NADDC, Jelani Aliyu, while speaking to reporters, said the Council has secured approval from the Bank of Industry (BOI) on reducing the interest rate on loans borrowed from it by local beneficiary automobile stakeholders by two per cent across the board and the deferment of principal repayment of such loans from the BOI for a period of three months.

The NADDC boss said the approval had been communicated to the secretariat of the Nigerian Automobile Manufacturers Association (NAMA), expressing hope that the incentives would go a long way in reducing the burden on the stakeholders and allow for a smooth, unhindered and continuous growth of the Nigerian automotive sector.

Responding to questions on the modalities of the incentives that will be extended to the industry players and how the NADDC will be able to identify genuine local automotive and allied components assemblers, Jelani said: “In line with the Federal Government’s directives, what we are primarily doing is offering palliatives to those stakeholders that have already qualified and benefitted from the NADDC loans through the Bank of Industry (BOI).”

NADDC says in a letter that the reduction of applicable interest rate by two per cent is for a period of one year, that is 12 months with effect from April 1, 2020, to March 31, 2021, such that at the expiration of the 12-month period, the applicable interest rate on each facility shall revert to its initial approved rate as stated in each customer’s respective Loan Offer Letter. It said this condition was, however, subject to the full liquidation of all interest charges as of March 31, 2020.