The Africa Continental Free Trade Agreement (AfCFTA) which was finalised at the virtual African Union Summit in December, is an important milestone for the realization of the AAAM’s vision of building a successful automotive ecosystem which will lead to a sustainable industry that creates significant jobs and assists in the industrialization of the auto sector for Africa.
AAAM applauds the African Union for pioneering and launching the African Continental Free Trade Area on 1 January 2021; this will ultimately become the world’s largest free trade bloc covering a market of initially more than 1,3 billion people and up to $3 trillion dollars in GDP with the potential of increasing the intra Africa trade by over 50%. The establishment of the AfCFTA is necessary and opportune considering the unprecedented population growth, the high proportion of youth and the growing middle class.
“The Secretariat of the AfCFTA has the unique opportunity of shaping a continental automotive policy with countries that are willing to participate in the industrialisation of the auto sector. The AAAM is fully committed to supporting the Secretariat in realizing the vision, of creating demand and production for 5m new vehicles per annum from the 2019 level of 1.1m. This growth requires the implementation of progressive automotive policies and eco systems across the continent, where hub countries in regions will assemble vehicles supported by surrounding economies sharing in the value chain; ultimately regional markets will trade vehicles and components. Country and regional partnerships are not new to the development of the auto industry around the world” said David Coffey CEO of AAAM.
“It is anticipated that the Rules of Origin for the automotive industry will be concluded by mid-2021 thus paving the way for real industrialisation of the sector across the continent. Effective industrialisation is fundamental to the journey of becoming competitive and to the subsequent liberalization of tariffs across Africa – the AfCFTA will provide the scale that is required for industrial competitiveness” concluded Coffey.