Resolving Nigeria’s inability to export locally made autos to the African market under AfCFTA

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Guest blog written by Francis Anatogu

My Expectations of IPP Online Course
As the Head of the Secretariat of the National Committee for the implementation of the AfCFTA for Nigeria, I was conscious of the national debate that stalled Nigeria’s entry into the Continental Free Trade Area and the eyes of the entire country on what we were doing. I also could not ignore the catalogue of previous failed attempts to implement other bilateral, regional and global treaties and trade agreements. With COVID-19 pandemic, negotiations stalled, and our emerging implementation plan was no longer realisable and yet we needed to keep going. We adapted using digital channels but then the question remained, “how do we reach our grassroot audience?” Furthermore, coming from the private sector, how do I navigate through the civil service hierarchies and rigid organizational walls to promote inter-agency collaboration without being perceived as a threat.

So, I signed up for the IPP course, to: (a) learn how successful countries implemented policies; (b) understand the additional requirements, tools and practices for implementing a public policy versus implementing a transformation project for an organization, (c) evaluate what we were doing at the Secretariat of Nigeria’s National Action Committee on AfCFTA against what we are supposed to be doing; and (d) gain a credible toolkit to help me guide my team and the wider interventions execution teams.

Key Learning and Takeaways
What didn’t I learn from the IPP Course? Every aspect of the Course touched a deeply nagging concern that executives and policy implementation practitioners can understand.

First, I learnt about the limitations of the classic project management “planning and control” methods in dealing with complex problems. Because public policy problems are multi-faceted with many unknowns and uncertainties, you can only plan so far in advance. I also learnt about balancing functionality and legitimacy, the quest for results as we see them at execution level and the risks as our principals and key stakeholders see them, which determines the level of trust and support we get.

The second lesson was to focus on understanding and framing the policy challenge. Interestingly, it added a new dimension to the “move off the solution” lesson I learnt from a Sales Effectiveness course I attended years ago. It also brought back the Fishbone Diagram, a very practical tool used extensively for incidents root cause analysis in the oil and gas and manufacturing intensive organizations.

It was very reassuring to note that I was not alone in dealing with issues of ownership of actions and interventions and it provided guidelines on building multi-agent leadership. The two key takeaways are that no single agency can solve a public policy implementation challenge and leadership happens at every level. So, refocusing on mobilizing others is critical to success.

The Course also challenged me to think through why I was leading the charge on my policy implementation. Beyond the formal position, why am I taking the risks of providing leadership despite the unknowns and uncertainties and the sheer effort of mobilizing others? How does it affect me? How does it affect my community? If not now, when?

The most striking and perfectly timed aspect of the course is the four-part series (the 4Ps) focused on building practitioner’s capacity to deal with the personal leadership challenges to be expected during a policy implementation challenge.

First part focused on perception and leadership – understanding how perceptions impact on how we process information. Second is projection – understanding how the stories we tell about where we think things are going in the future tells a story about who we think we are as leaders and impacts on our ability to mobilise and sustain support of others. The third element is about People – the emotional impact that we have on others as leaders, as well as what we go through as we engage with a variety of leadership activities. Simply, we are still humans and our mental health counts too! The fourth element is the Process – the process of engagement and accountability to achieve optimal results, prevent problems of group think, hidden gem and herd behaviour.

In summary the IPP course provided me with the tools to structure my struggles, manage my mental health through delegation and time management and influencing others by building trust.

About my Implementation Challenge
It was difficult but after a few iterations, I was able to narrow down my implementation challenge from implementing the AfCFTA for Nigeria to a specific problem of “resolving Nigeria’s inability to export locally made Autos to the African market despite existing combined assembling capacity of 447,000 unit per annum.

Nigeria launched her Automotive Industry Development Plan (NAIDP) in 2014 which attracted the interest of leading international carmakers and led to the resumption of small-scale vehicle assembly in the country. Currently there are 31 licensed producers of cars, trucks, and buses in Nigeria, however only about seven companies are assembling, and the local content is estimated at an average of 5% compared to the 40% envisaged under the AfCFTA. Furthermore, due to a host of challenges, auto makers are now moving to neighbouring Ghana and setting up assembly plants there with plans to export the vehicles to Nigeria under ECOWAS Trade Liberalization Scheme and AfCFTA.

My problem deconstruction exercise followed interviews with the ten (10) most active local producers, and it identified issues of (i) unfavourable policy and regulatory environment, (ii) low demand for new cars and (iii) inability to meet the AfCFTA rules of origin requirements.

At the root of the unfavourable regulatory environment are the policy inconsistency evidenced by the unexpected reduction in tariff for new car imports from 35% to 5% in 2020, absence of a regulatory framework backed by an Act of the legislature, to control importation of used cars and safeguard manufacturing and export incentives.

At the root of the low domestic demand for locally produced new cars are low purchasing power of local consumers, lack of affordable financing schemes (single digit interest loans) limited promotions and after sales services by local producers, perception of lower quality compared to global competitors and low enforcement of executive order to promote local content in government procurement.

At the root of the challenge to meet the 40% rules of origin requirement for AfCFTA are underdeveloped local raw materials and components value chains, and low local demand for new cars to attract OEMs.

Key Progress and Insights
Engagements with the local producers and the automobile development agency yielded the minimum requirements to attract OEMs, additional industry and development agencies connections and access to regional sector development studies on priority components to realize the AfCFTA rules of origin. The identified approach will achieve scale by focusing on products required by new cars as well as imported second-hand vehicles.

Engagement with our principals and public sector agencies revealed short-term effort to correct the inconsistencies in the 2020 finance act and the longer-term effort to pass an auto sector development act. It also revealed a gap in our assessment of the size of the solution spaces which triggered a return to the drawing boards.

It was intriguing to observe that there are many teams in several agencies working in silos to address the Auto Sector. Significant amount of time was spent building trust and clarifying mandates of relevant stakeholders and subsequently an agreement was reached to set up a multi-agency (private/public) forum to collectively drive the interventions within this policy challenge.

Yet another achievement was the identification of provisions in existing laws which can be explored to fund production incentives and consumer purchase schemes. An unexpected positive twist was the establishment of a new Council to enforce compliance to the executive orders to promote local content in public procurements which will improve offtake of locally produced vehicles. We have also commenced sensitization of subnational government on the auto-sector development and to pull them into a planned guaranteed offtake scheme.

Applying PDIA beyond the IPP Course
I have introduced PDIA to my team implementing e-commerce for MSMEs programme. By focusing on the problem, we have refined the root causes and refocused the implementation. Through multiple engagements, the team has secured funding and established a multi-agency implementation team.
I have also commenced a learning programme to build the competence of my core team at the Secretariat to handle complex problems using PDIA process as well as redesign our performance management templates to track learning in addition to progress and outcomes.

Concluding Words of Wisdom
It was comforting to note that most practitioners faced similar challenges irrespective of subject matter or clime. Essentially, we are all dealing with a chameleon the size of an elephant. With the PDIA toolkit we can tackle the problems in byte sizes, build the capacity of our core and multi-agency teams so we can distribute the load, manage the team, the program and ourselves better and influence others more effectively.

This is a blog series written by the alumni of the Implementing Public Policy Executive Education Program at the Harvard Kennedy School. Participants successfully completed this 6-month online learning course in December 2021. These are their learning journey stories.

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