OPINION | Trading within Africa beneficial for automotive industry
As we celebrate Africa Day on Sunday, I find myself hearkening back to the immortal words of the father of our modern continent, Kwame Nkrumah, who said: “I am not African because I was born in Africa, but because Africa was born in me.”
The words have a particular resonance for me as a German who has made the continent her home, but Nkrumah’s other comment, uttered more than 60 years ago, is even more poignant in a world that has become far more volatile and polarised than he would have imagined: “We face neither east nor west, we face forward.”
In 2025, we are a quarter of the way into what many people hoped would be the African Century, a halcyon time when the continent would finally achieve its full potential given the incredible resources – natural and human – that we have.
On March 21 2018, the African Continental Free Trade Agreement (AfCFTA) was signed, creating the largest single trade bloc on the globe after the World Trade Organisation. The World Bank believes this free trade area has the power to lift Africa’s GDP by 10% across the board, lift 30-million people out of extreme poverty and boost the incomes of a further 68-million who live on less than $6 (about R108) a day.
One of the greatest mechanisms for the ultimate success of the AfCFTA will be the automotive industry. Africa has been steadily de-industrialising since the 1970s, when it accounted for 3% of global manufacturing. In the process, it has become a victim of the extractive economy, providing the very raw materials for products it must then reimport for its people.
Not every country can have its own automotive assembly plant or industry – it shouldn’t because these will be unsustainable. But what African countries can do is for some to build vehicles from the components produced locally in other African countries from material mined or grown in Africa. That way everyone benefits, especially the consumer who can now buy duty-free vehicles that are built on the continent for the continent’s needs.
We are very close to achieving this, we are on the cusp of resolving the Rules of Origin, which will stipulate the level of localisation that we need for a sustainable automotive industry that can make full use of the benefits of the AfCFTA.
Manufacturing components and assembling vehicles across the continent will encourage the development of upstream and downstream sectors, but the most important aspect will be the production of vehicles that are designed for Africa. Far too many vehicles on the continent are previously owned imports from other parts of the world. They are not meant for African conditions.
Successful automotive industries are those which have forged close private public partnerships between the OEMs and the governments of the countries in which they operate.
In SA, the automotive sector must work even more closely with the government to ensure the policies that are in place remain relevant with achievable timelines to ensure a future-fit industry. SA needs to work with its African counterparts and look to the successes of North African markets, such as Morocco, to understand how it can learn from them.
Developing a sustainable automotive industry in Africa by companies in which Africa is born, working with African governments for whom the prosperity of their people is paramount, will unlock the potential of the African Century and turn it together to allow Africa to forge its own path forward.