An industry whose time has come

However, Africa’s auto industry, valued at $30.44 billion in 2021, is expected to increase by nearly 40% to $42 billion by 2027. 

With demand rising across the board, and an expected switch to the exclusive use of electric vehicles by 2035 complicating the position, it is clear that Africa has to take control of the auto industry if it is to ensure that the continent will be able to utilise in full the expanded trade opportunities of the AfCFTA.

It is with this in mind that Afreximbank and the private sector have been working to develop a sustainable automotive industry in Africa. The Afreximbank Automotive Programme, for example, is a comprehensive three-pronged strategy to achieve this aim.

It is working with the African Association of Automotive Manufacturers (AAAM) to harmonise automotive standards, develop a focused training programme for the public and private sectors and provide financing to industry players across the value chain. Afreximbank has committed $1 billion to the industry through direct financing and partnerships.

The two organisations are collaborating to provide financing to industry players along the whole automotive value chain, including lines of credit, direct financing, project financing, supply chain financing, guarantees, and equity financing, amongst others.

With the focus turning increasingly towards electric vehicles and the batteries needed to power them, Africa finds itself in a good position to capitalise on the trend.

“Many of the raw materials, such as manganese, cobalt, and rare earth minerals, required in the production of new energy vehicles are found in Africa,” says Dave Coffey, CEO of AAAM.

The Automotive Exhibition at the 2023 Intra African Trade Fair (IATF) in Cairo drew a large and enthusiastic audience; it seems certain that the next exhibition, IATF2025 in Algiers, will draw an even bigger audience for an industry whose time has come in Africa.