African countries are queuing up to be part of a pan-African motor industry, Johan de Jager, COO of the Automotive Investment Holdings (AIH) consultancy group, said on Tuesday.
In West Africa alone, up to a dozen countries claim potential capacity to produce components for vehicle manufacturing. Dave Coffey, CEO of the African Association of Automotive Manufacturers (AAAM), said that even if it was too soon to verify their claims or to be sure that products would meet quality standards, it was reassuring that so many countries wanted to be part of a continental motor industry.
They were speaking in Durban at an automotive forum — part of the Intra-African Trade Fair — on plans to create a series of regional motor industries. The idea, driven from SA, is to have one each, in south, west, north and east Africa.
Proponents say the African Continental Free Trade Area, ratified early 2021, will create the economic and trade conditions to make it possible. De Jager said that in meetings with members of the 15-strong Economic Community of West African States (Ecowas), most claimed to already make automotive parts or other products that could be adapted to motor industry needs.
Products included tyres, wiring, radiators, foam, windscreen wipers, rolled steel and seat covers. This week, government officials from Nigeria and Ghana argued that their countries were logical centres for a regional industry. Ghana, despite being much smaller, is the favourite after Nigeria failed to live up to previous promises of investor-friendly automotive policies. On Tuesday, Nigeria said its latest such policy was likely to be signed into law soon.
Elsewhere, SA, Kenya and Egypt will form regional hubs. Morocco, second only to SA in African vehicle production, operates as part of the European motor industry and shows little interest in the African market.
Of an estimated 5-million vehicles sold in Africa in 2020, more than 4-million were used vehicles — most dumped from wealthy nations. Africa’s new-vehicle market of 912,863 — of which SA, Morocco and Egypt contributed 733,246 — was barely 1% of the world’s 90.4-million.
Africa has been described as the “final frontier” of the global motor industry. Coffey believes with the right incentives and a willingness by governments to limit the flow of dumped vehicles, the African new-vehicle market could rise to 5-milliion by 2035.
However, Mike Whitfield, AAAM president and head of Nissan Africa, said Africa itself must take advantage of this growth, and not leave it to motor industries on other continents.
“Äfrica desperately needs industrialisation and the motor industry is in the perfect position to lead the way,” he said on Tuesday. “We have a unique opportunity to uplift the continent and its people. We mustn’t waste it.”
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