Car maker, Hyunda,i has reached an agreement with the Federal Government of Nigeria to establish vehicle assembling plant in the country, president Buhari announced on Tuesday.

Hyundai CEO, Mr. Chang Hag Kim was at the state house, Abuja, yesterday where he was received by Buhari, and assured of adequate support to help him make the plant a reality.

“We will collaborate and support to make the investment a reality,” Buhari assured.

The President further stated that his goal has been to achieve self-sufficiency in the supply of petroleum products within the next three years.

Mr. Hag Kim promised to use his existing resources to set up the plant and the refinery: “We have been building refineries worldwide. We have the biggest in South Korea, with 650, 000 barrels per day capacity. We are also in Venezuela, Iraq and many other places. We would be glad to contribute our quota in Nigeria,” he said.

He also noted that Hyundai has a workforce of 15, 000 personnel globally, and will gladly use it to contribute to the development of the Nigerian economy.

Hyundai Oilbank is an oil refining company established in 1964, with refining capacity of 650, 000 barrels per day. The business portfolio of Hyundai Oilbank and its five subsidiaries include oil refining, base oil, petrochemicals and a network of gas stations.

Saudi Aramco, the most valuable company in the world just acquired 17 percent of Hyundai Oilbank from Hyundai Heavy Industries Holdings for US$1.2 billion. So there is no questioning if Hyundai has the capacity to fulfill its promise on refinery.

However, Hyundai’s plan to establish vehicle assembly plant has not gone well with some Nigerians. The displeasure stems from concern that Innoson Motors, the only indigenous vehicle manufacturing company in Nigeria will have to compete with Hyundai. And at a time when the government is keen on banning every imported product in the name of promoting local products, one wouldn’t blame them.

But in other climes where there are indigenous vehicle producing companies, foreign automakers are also allowed. And the system has enabled healthy competition that cut down the cost of vehicles.

For instance, China has recently opened its doors to many American car producing companies; Ford, Tesla etc. while the U.S, Germany, France and other major car producing countries have been in the deal for a long time. Interestingly, these countries have more than one car manufacturing company. In the case of Nigeria, there is only Innoson, and left to it, Nigeria’s car demand can never be met.

Yearly, Nigeria spends N2.4 trillion on vehicle importation which Hyundai models are significant part of. Although most of the cars imported into Nigeria are fairly used (Tokunbo), having a notable brand establish a vehicle plant will cut the amount of money that goes out of the country annually. And also, having a notable brand of foreign origin established in Nigeria will create choices of new vehicles within reach; where buyers will pay no duties – a cost saving idea, if not that it will hurt indigenous car makers.

Should Nigeria copy China?

In 1994, China issued policy for its Automotive Industry. The “1994 Auto Policy” introduced restrictions on foreign automakers to owning more than 50 percent in any Sino foreign joint venture and also limits the foreign automakers to no more than 2 joint ventures for any single type of vehicle in China. Lexology noted that the 50% + 2 rule was the bane of existence for many foreign automakers.

For years, the 50% + 2 rules were considered as a necessary policy to buy local automakers time to gain the skills, master the technology, and build their brands to allow them to compete before international automakers would be given access to the Chinese market.

Chinese policies on auto-manufacturing and foreign investment was gradually eased as the country attain its goals for the automotive industry. For instance, in 1995, China introduced the “Foreign Investment Catalogue” which detailed the shareholding limitation on foreign automakers. Since then, the Foreign Investment Catalogue has been amended eight times to reflect China’s evolving views on foreign investment’s role in industrial policy.

Generally, the Chinese policy was considered successful. China gradually became the world’s largest automaker, a position it has held since 2009. Having achieved its objective to this degree, China has been relaxing its policy on the automotive industry.

In 2018, Chinese authorities jointly issued the Special Administrative Measures for Admittance of Foreign Investment (2018 Negative List). The 2018 Negative List confirmed the pledge to fully remove foreign investment ownership limits on auto industry over a 5-year transition period.

The relaxation of this rule has enabled foreign companies such as Elon Musk’s Tesla, to establish vehicle manufacturing plants in China, especially NEVs. And there will be more beneficiaries of the short term policy relaxation window.

But while the Chinese strategy brilliantly helped its auto industry to occupy a prominent position on the world stage, peculiarities may hinder it in Nigeria if copied. For instance, Innoson is the only indigenous automaker in Nigeria for now, unlike China that had several vehicle manufacturers competing to get to the top at the same time. There is significantly no other company of Nigerian origin pushing its brand in the auto industry. Therefore, the government cannot reasonably restrict foreign auto investments in the country when the long term production capacity of local manufacturers is not enough to make cars that will go round.

The recent approval of 5G trialing came to a successful end and birthed hope of future where internet services thrive on the fastest speed in Nigeria.

The Ministry of Communication and Digital Economy has been on its toes in providing modalities needed to foster a 5G future in the country. But the interest appears to be attracting tech companies as Huawei promised to provide MTN with the needed support for the 5G-roll out.

The company assured MTN that it would provide advanced and innovative support that will enable efficient roll out of 5G services Nigeria.

Speaking in Abuja, earlier this week, Managing Director of Huawei Technologies Company, Mr. Zhang Lulu, said the company will supply MTN with the innovation that will offer customers the best experience.

Huawei has been at the forefront of 5G roll-out globally, and wishes to offer the technology behind it to MTN, especially as they are in partnership. This is coming at a time when there is global quest to establish 5G network as a faster alternative to 4G and 3G networks.

Since Huawei’s ouster in the U.S market, following a dispute with the government, the company has been looking for ways to expand its lead role in 5G roll-out, seeking partnership with telcos in Europe and Africa.

In Europe, the company has been noted to lobby its way far above its counterparts and competitors for 5G services, Ericsson and Nokia. Not wanting to limit itself to Asian markets only, Huawei has cashed in on the recently launched #Votefor5G campaign, strategizing methods to win the approval of European MEPs for a prominent position in the continent’s 5G roll-out.

Transparency reported that Huawei has had 42 meetings, 10 of which specifically mentioned the deployment of 5G technologies. This represents 24% of all 5G related meetings declared, a share that puts it in the top three together with Qualcomm, an American manufacturer of 5G chips for mobile phones and the 5G automotive association, a large consortium of companies seeking to market self-driving vehicles. Ericsson is reportedly having only 9.5% of its high-level meetings on 5G while Nokia has only 6%.

However, a politically inspired controversy keeps following Huawei wherever it goes in the West. In December last year, a Huawei executive was arrested in Poland on charges of spying for China, though the company insisted it has nothing to do with its operations, the development only heightened an already intense suspicion about Huawei’s activities in Europe.

The consequence of being an independent enterprise of Chinese origin is that you never really have to be treated as one in the West, because everything in China is under the control of the Chinese Communist Party (CCP). Martin Thorley, an expert on international engagement with China at the University of Nottingham explains it this way:

“Imagine if the Conservative party in the UK controlled the army, the judiciary, all newspapers, the police force, major companies, and all universities. It would be a very different country.

“Huawei is part of this network and subject to these forces, so the question is whether a company ultimately subject to the whim of the CCP should be involved in sensitive security projects abroad. Some may argue that it should but they need to understand that when called upon Huawei must do as the part says.”

Gradually, countries and companies are keeping their distance from Huawei. Vodafone was among the first in the UK to cut every tie with the Chinese company. Huawei has also been barred from supplying next-generation 5G equipment, the technology that will connect to the Internet of Things (IoT) to Australia and New Zealand.

It is through this path filled with politically-charged hurdles that Huawei struggles to exert a leadership role in 5G roll-out across the world. But it seems to be weighing its options, and Africa is becoming a destination of interest because of China’s influence in Africa or seeming less-government interest in its activities. Therefore, Huawei’s only obstacle in Africa will be lack of governments’ will to push 5G trials.

So in African countries where 5G has been trialed and approved, technical innovations needed to implement the roll-out become a barrier, but an opportunity for Huawei to get in the way.

From 5G network equipment to devices, African countries have little options than to accept excitedly, anything that Huawei has to offer. MTN is the first in Nigeria; many more operators in the telecom industry will join the list in no time.