The policy is placing import restriction on new and fairly used vehicles by raising duties on them to 70 per cent from 35 per cent.

Although the agency is still fine-tuning the process of establishing the finance company, NAC said its counterpart funding for the company would come from its long-standing deposit at the Bank of Industry (BOI).

The Director of Policy and Statistics of NAC, Luqman Mamudu told The Guardian that his council might request the transfer of its N19 billion with the Bank of Industry into the account of the new finance company as part of its counterpart funding for the proposed company.

According to him, the company would be managed by a South African bank, which has a subsidiary in Nigeria, adding that another N300 million would also be paid into the company’s account when it is finally incorporated.

The N300 million is expected to come from the Nigeria Customs Service, which collected the money at the port on behalf of the council. It represented levies collected on new vehicles imported through the nation gateways in the last eight months.

The customs have kept the money to be released on demand by the National Automotive Council.

The South African bank (Wesbank) had since signed a Memorandum of Understanding (MOU) with NAC for the management of its finance company that is expected to disburse loans to Nigerians who are willing to purchase new cars from local manufacturers, at single digit interest rate.

‘‘The legal instrument for the new finance company is not yet ready. As soon as it is ready, we will go for its registration,” Mamudu said, even as hinted that the council was already finalizing the structure for the new company.

To obtain car purchase loan from the company, he said the loan would be disbursed through a commercial bank as all loan seekers are expected to own a functional bank account before approaching a car manufacturer with an intent of purchase.

According to him, the loan application will therefore be processed and forwarded to Wesbank for detailed processing before releasing the loan through a bank which will be responsible for gradual pay back from the customer’s aacount.

The National Automotive Council Director also hinted that the South African bank would also be authorized to source credit from international finance institutions, like the African Development Bank (ADB), the International Finance Corporation (IFC) and others to increase its capital base when fully incorporated by the end of April.

The Government said it would start full implementation of the automotive policy next month when the Nigeria Customs Service is expected to commence collection of 75 per cent duty on fairly used vehicles.

The policy implementation has been attributed to a reduction in the volume of car import through the Nigerian Ports since the beginning of the year when the number of car import declined from 27,000 to 8,000 in January this year.

Car manufacturers have expressed delight at the development, saying it would encourage the expansion of their production capacity.