AAAM to help Ethiopia establish auto sector

The African Association of Automotive Manufacturers (AAAM) has been appointed to develop an automotive policy for the Ethiopian government that will encourage global original equipment manufacturers (OEMs) and component manufacturers to invest in the country.

David Coffey

AAAM was appointed to develop the policy by the Special Initiative on Training and Job Creation, which is commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by, among others, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

In addition to the contract to draw up an automotive industry development policy for Ethiopia, an automotive training programme for existing assemblers and workshop owners will be developed and piloted along with the development of a foundational concept note for the creation of a Centre of Excellence to train local people for the highly skilled jobs that the industry will need.

The project has clearly defined milestones and deliverables and will run from March 2021 through to the end of October 2021.

AAAM CEO David Coffey said it is an important milestone for AAAM in the development of the automotive industry in Africa to be awarded this contract by the GIZ. Coffey said the contract is indicative of AAAM’s collaborative efforts across the continent to facilitate sustainable automotive industrialisation is gaining traction.

David Coffey, CEO of the African Association of Automotive Manufacturers (AAAM)

The German automotive industry in January 2021 recognised the potential of Africa by strengthening its ties to the continent through a cooperative partnership between the German Association of the Automotive Industry (VDA) and AAAM, which coincided with the launch of the African Continental Free Trade Area (AfCFTA) on January 1 2021.

Coffey added that Ethiopia is an important assembly hub in the East of Africa region.

“With a population in excess of 100 million and a very low motorisation rate of two vehicles per 1 000 inhabitants, Ethiopia’spotential is significant with the right ecosystem in place.

“The integration of Ethiopia into the regional and ultimately continental single market will provide scale that will facilitate competitiveness.

“Our aim is to unlock the economic potential of the African continent by promoting a policy environment that is conducive to the industrialisation and growth of the automotive sector and that attracts investments by both OEMs and component manufacturers, which in turn creates highly skilled jobs and affordable mobility for consumers,” he said.

The objective of the Special Initiative on Training and Job Creation, which also operates under the brand Invest for Jobs, is to create jobs and apprenticeships and to improve working conditions in its partner countries.

The AAAM, which was established in November 2015 and is the only African body focusing on the expansion and deepening of the automotive industry across the continent, plans to achieve its aims by working with governments to shape and implement policies that will attract investors, unlock the economic potential of the continent and align a global network of stakeholders committed to the development of the automotive industry in Africa.

Coffey added that the first task of the policy project will be to conduct a comprehensive local and international automotive sector analysis, which will be followed by the development of an automotive policy framework for consideration by the Ethiopian authorities.

After joint consultation, the automotive policy will be implemented with the aim of attracting global automotive investors from the component and vehicle manufacturing sectors, he said.

Coffey said a pilot automotive skills development ecosystem, which adheres to international standards, will be developed concurrently and will ultimately lead to the establishment of the Centre of Excellence.

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