By Moses Akaigwe
For Nigeria and other African countries to attract investments and unlock their automotive potentials, there must be commitment on the part of their governments to the formulation and implementation of vibrant automotive policies.
This is in addition to the various countries and regions on the continent collaborating among themselves and fostering regional integration based on their individual strengths and areas of comparative economic advantage.
These were the submissions by the Chief Executive Officer (CEO) of African Association of Automotive Manufacturers (AAAM), Victoria Backhaus-Jerling, at an event organised recently in Kigali, Rwanda, by Volkswagen Group Africa for motoring journalists.
.She also underscored the importance of viable manufacturing hubs like the ones in South Africa, Morocco, Tunisia, and other countries, from where components are produced and delivered to assembly plants.
Reference was also made to Algeria as an emerging country for vehicle manufacturing and component production even as she disclosed that auto policy is being developed for the industry in that country.
The AAAM CEO explained that a robust automotive policy with legal support is an incentive for the original equipment manufacturers (OEMs) to come to any country’s industry and invest.
She said in her elaborate presentation: “We have identified some of the key drivers to unlock Africans automotive potentials. Number one is the political willingness to develop and implement the automotive policies. If you don’t have policies in place, it is rather likely that you will not get investments and you wouldn’t find OEMs and also component manufacturers that will come to you to manufacture.
“That is why we always encourage the government and work with them on the need to develop policies and the need to build on it, because we are all working towards the (goals of the) African Continental Trade Area Agreement (AfCFTA).
To drive home her point on regional cooperation, Backhaus-Jerling cited the example of South Africa (which has the highest number of manufacturing plants run by OEMs in Africa) and Botswana.
“In Botswana, we have two component manufacturers that manufacture wire harnesses and deliver them to OEM plants in South Africa. So, you can already see a regional collaboration, and we would like to see more of that. We will like to see it also in other hubs which are being developed,” the AAAM CEO remarked.
According to her, there is need for collaborations to exist between regions, particularly between Sub-Saharan Africa and North Africa, because, “as I said, a country like Tunisia is also very strong in component manufacturing, while Algeria is an emerging country for vehicle manufacturing.”
She spoke further: “We are really trying to advocate regional integration, regional collaboration, because you cannot do it all on your own. And I think that this is an important message to spread because you need your neighbours in order to create demand and in order to upscale manufacturing as you can’t do everything as one country.
“You need to find a niche and that is why we are trying step in and that is why we are trying to create linkages on the continent to support countries to see what do they make, and how do they become part of the automotive value chain.
She said that in view of the fact that on the continent, many people cannot afford a car, AAAM recognises the need for vehicle financing for mobility solutions which also helps to grow the demands for vehicles.
“It is important to work together as a region, and that is why we encourage the establishment of regional value chains. This is because, it is not every country that would be able to manufacture vehicles.
According to her, this is why there is the need for manufacturing hubs in regions of Africa, where some countries will be contributing to the value chain by producing, for instance, components,, or by processing minerals.
“This is because Africa holds all of the minerals we do need to manufacture vehicles and components. Majority of the minerals are processed in South Africa. We are also lobbying two African governments to process the minerals within their countries and within the region. One of the most important things as well is sectoral implementation of the African Continent Free Trade Agreement.
Backhaus-Jerling described AAAM as “a very busy organisation,”which invests in skills development with a view to creating jobs, and is currently hosting the inaugural Industrial Policy Executive Short Course (ESC) in Durban, South Africa..
Founded in 2015, AAAM’s mission is to create sustainable and affordable mobility solutions, facilitate strategic linkages and partnerships, and develop regional automotive value chains that promote production and trade within and beyond the African Continental Free Trade Area (AfCFTA).
It has a total of 80 members from all parts of the African continent.
This milestone initiative is designed to empower senior government officials across the continent to unlock automotive production opportunities, affordable mobility solutions and catalyse industrial development.