Bright future forecast for the automotive sector and youth start-ups in Africa

Photo: Dave Coffey, CEO, African Association of Automotive Manufacturers

Afreximbank, in collaboration with the African Union, has hosted the second of its five webinars raising awareness for the African continent’s premier trade event, the Intra-African Trade Fair (IATF2021), to be held in Kigali, Rwanda, from 6 – 12 September 2021, under the theme ‘Building Bridges for a Successful AfCFTA.’

Dave Coffey, CEO of the African Association of Automotive Manufacturers (AAAM) highlighted the huge potential of African markets to be the next major opportunity for the global and domestic automotive sector with its young demographic profile, rapid population growth and urbanisation, burgeoning middle class and technology all suggesting exponential growth in demand.

He said: “We regard the ‘Pan African Auto Pact’ as the potential gamechanger for the development of the African automobile market, through its potential to connect African regions to create a harmonised portfolio with distributed value chains and manufacturing, started with a ‘coalition of the willing.”

In a second presentation on the African Automotive sector, Gainmore Zanamwe of Afreximbank’s Intra-African Trade Initiative, focused on the bright prospects for the sector through the further development of regional value chains. He said: “Through these initiatives, we could see the new vehicle sales increase from 1 million to 5 million sales a year across the continent.”

Afreximbank’s strategy for the Automotive industry includes:

  • Automotive Financing – providing financing and risk-sharing to industry players and consumers;
  • Regional Automotive Value Chains – Fostering the emergence of regional value hubs with focus on value-added manufacturing created through joint ventures between global Original Equipment Manufacturers, tier 1 suppliers and local partners; and
  • Policy and Capacity Building – Supporting the setting of the right automotive policies and capacity building programmes.

Allan Majuru, CEO of ZimTrade, stressed the importance of Youth start-ups in driving growth in African economies, with their key advantages being their technology savviness, innovation, risk-taking, early-adopting and game-changing mentality, and their ability to work smart. To reach their potential, significant support is required in the form of capacity development and mentoring, networking, access to finance, supportive infrastructure, enabling policies and market linkages.

Emery Rubagenga, CEO and Founder of Ishango, examined the challenges facing Youth start-ups and SMEs in Africa which include access to finance, infrastructure deficits, the need for more countries to join Rwanda and Ghana in creating an enabling environment for start-ups, differential laws and regulations across the continent and significant competition.

The African Continental Free Trade Area (AfCFTA) promises to provide exponential opportunities through its creation of a single liberalised continental market with free movement of both capital and people.

In addition to the immense trade and investment opportunities proffered by the AfCFTA, the event also highlighted the importance of attending the IATF2021 for all those involved in African trade and investments.

IATF2021 will provide a unique and valuable platform for businesses to explore a single integrated African market of over 1.3 billion people with a combined GDP of over US$2.5 trillion.

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