Summary of the Gearing Up webinar: Accelerating growth in Africa’s Automotive Industry

The event focused on the automotive trade sector, with reference to;  specific growth opportunities, strategies, and investment required to support economic development across Africa. 

Partners to the event included; Afreximbank, Invest Africa and the Intra Africa Trade Fair 2021. 

The Intra African Trade Fair 2021 is scheduled to take place from 8 – 14 December in Kigali, Rwanda. 

This event will see approximately 1,100 exhibitors, 10,000 visitors – potential buyers, 5,000 delegates, 55 countries and over $40 billion of trade and investment deals.  The event will comprise of Exhibitions, Trade and Investment Forums, IATF Virtual, Creative Africa Nexus Program, B2B and B2G exchanges, Country days, IATF automotive show, and youth start up programs.

Executive Summary

  • There are many unrealized opportunities in the automotive sector, on the African continent.
  • The African continent has around 1.3 billion people and only constitutes 1% of global automotive sales.
  • 85% of sub-Saharan vehicle sales are second-hand vehicle
  • That said in South Africa, 85% of vehicle sales are new cars

AAAM Activities / Progress

    • In March 2020, the Ghanaian Government approved the automotive policy
    • VW started assembling vehicles in August 2020
    • Toyota & Nissan will commence assembly in Qtr3 2021
    • A further 3 OEMs have registered with the Ghanaian government as assemblers
    • Some component manufacturing has commenced, further development is under way
    • There was an exploratory visit in March 2021 which included some international component manufacturers; further visits are planned for 2021
    • Awaiting announcement from the Kenyan Government on the adoption of the Auto Policy; expected in Qtr2 2021
    • Discussion has commenced on component manufacturing; all parties are optimistic of the opportunities this presents
    • AAAM was contracted by GIZ to develop an automotive policy and associated eco-system for the Ethiopian government – scheduled for completion by the end of October 2021
    • AAAM and Afreximbank have met with the Minster of Trade and Industry in Egypt and offered to support / fast track the Egyptian automotive program.  Preliminary work has commenced and as in Kenya, conversations have been commenced on component manufacturing.
    • AAAM applauds the AU for launching the African Continent Free Trade Area on 1 January 2021 as this will become the largest free trade block in the world
      • The Secretariat has a unique opportunity to shape the continent automotive strategy and policy with the countries that are willing to participate.  The Secretariat is committed to driving industrialisation of the African automotive sector.
      • The Free Trade area provides the scale of economy required for Africa to become globally competitive.
    • VDA – German Automotive Industry Association are fully committed in helping to  develop the automotive industry in Africa.
    • Afreximbank – are collaborating on key initiatives that will drive the Vision of Industrialisation on the African continent.
  • Dhiren Van Mali from Ford Motor Company commented that the sentiment to grow the automotive industry in Africa is incredibly positive.  The African market offers opportunity to unlock the scale of manufacturing that is required, associated infrastructure development, finance models and supply chain strategies that are all needed for a stable policy environment.
  • Yves Nono from Robert Bosch commended that from a Component supplier / manufacturers perspective, they are aligned with the AAAM’S Vision, which shows huge potential.  Nono stated that there are currently 1.3 billion people on the continent – and this could double in the next decade and that mobility is a basic need.  The Automotive sector has a significant role to play in this regard.
  • Gainmore Zanamwe from Afreximbank explained that the bank was set up by member states and the private sector to facilitate intra & extra African trade.  The challenge faced is the low level of intra African trade which is currently only around 16%.  Gainmore Zanamwe agreed with fellow panel members that there are many opportunities for African countries to collaborate.  Operating under the AfCFTA creates a much bigger market, approximate GDP of $2.5 trillion (ranking of 8 just behind India and ahead of Italy).  As such, a viable policy and continental auto strategy is needed.