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Business News of Monday, 21 June 2021


Africa as dumping ground for used cars must stop – AAAM President

A file photo of imported cars A file photo of imported cars

The President of the African Association of Automotive Manufacturers (AAAM), Mike Whitfield, has said that the current situation wherein Africa seems to be the dumping-ground for used and unwanted automotive products needs to change.

He has therefore impressed on the global automotive industry to join forces and establish a strong base in Africa to help accelerate the continent’s economic growth. He believes with strong leadership and deliberate interventions the goal can be achieved through the Africa Continental Free Trade Area (AfCFTA).

Speaking in a virtual webinar to explore how the AfCFTA can help shape auto policies for African nations to drive industrialisation, Mr. Whitfield – who is also the Nissan Africa South (NAS) chairperson – said there are enormous statistics to show that the continent holds huge opportunities for the future of the automotive sector, and it is about time global players paid more attention to Africa.

“We need to understand that we have to promote safety, we have to promote standards of vehicles that come in; and I think we shouldn’t be seeing Africa as a dumping ground for vehicles out of developed markets. We need to make sure that we support the ongoing development of safety and standards,” he said.

He added that there is a huge responsibility to help in developing the human resource of the continent, and providing meaningful jobs which would contribute in the fight to reduce levels of poverty on the continent.

“Africa will happen; with all of us working together we can accelerate the process. It is much better to be part of the journey and work with organisations such as the AAAM to engage with interested parties and create that environment and ecosystem. It is a responsibility we have; we are all global companies, and we need to help lift a lot of people out of poverty. We need to create industrialisation, we need to bring good and quality jobs, we need to build the trade; let’s be part of it rather than sitting outside and watching.”

The AAAM also impressed on the Secretary-General of the Africa Continental Free Trade Area (AfCFTA), Wamkeli Mene, to give some special attention to the automotive industry and devise mechanisms which would help the continent contribute significantly to the global automotive value chain.

According to the AAAM, the continent has been identified as holding a huge opportunity for the future of the automotive industry with its demography and geography; and the AfCFTA is the best platform to accelerate the prospects envisaged.

“The AfCFTA is a catalyst that is critical. It is because the automotive sector globally has realised the potential, and that Africa is, without doubt, the last real frontier. We look at the numbers, and 1.3 percent of global automobile consumption is in Africa; and with the young growing population of the continent, there is enough cause to give Africa a lot of attention,” Mr. Whitfield said.

Policy Analyst at the AAAM, Alec Erwin, said the Rules of Origin – the criteria needed to determine the nationality of a product – must not be complex. He noted that if the contribution of the automotive sector in South Africa (7 percent to GDP) and Morocco (5 percent to GDP) is replicated in other parts of the continent, it would significantly boost GDP.

The Vice President of AAAM, Markus Thill, said localisation of the automotive value chain is one of the best avenues the continent can strategise on and make significant impact. He said countries with minerals and materials that are connected to the automotive value chain – i.e. aluminium, copper, rubber – can be supported to produce or add value and position themselves meaningfully within the value chain.

Secretary-General of the AfCFTA, Wamkeli Mene, acknowledged the views of the AAAM, saying they are very important and will play a critical role in fast-tracking the AfCFTA’s goals.

He noted that talks on the rules of origin are being looked at in a manner which will attract investments to the continent.

“In the next month, we are working with governments across the continent to make sure we reach an agreement on rules of origin which make sense from an investment point of view. That is the key challenge in the next 3-4 weeks. I think it is possible, I think we can get there,” he said.