Africa looks to build a more integrated automotive industry

The Africa Automotive Investment Forum, hosted by the African Export-Import Bank (Afreximbank) in partnership with the African Association of Automotive Manufacturers (AAAM), the African Continental Free Trade Area (AfCFTA) Secretariat, Egypt’s Ministry of Trade and Investment and South Africa’s Department of Trade and Industry, brought together policymakers and industry representatives in El Alamein, Egypt.

Held over two days on the sidelines of the Alamein Africa Forum, the event sought to highlight the policy changes and reforms needed to develop the automotive sector. It also provided a platform for investors to engage directly with policymakers and manufacturers, with the aim of facilitating joint ventures, supply agreements and future commercial partnerships.

A key priority was the establishment of joint ventures and technology transfer agreements between international automotive manufacturers and African businesses. These partnerships were expected to develop engineering, manufacturing and technical skills, create employment opportunities for the continent’s growing youth population and strengthen small and medium-sized enterprises in the automotive supply chain.

Afreximbank identified the automotive sector as a strategic priority for African industrialisation, intra-African trade and economic resilience. Several African countries were already attracting investment into automotive manufacturing, including the emerging new energy vehicle sector.

Kanayo Awani, Executive Vice President, Intra-African Trade and Export Development at Afreximbank, says the automotive sector is a critical pillar for advancing Africa’s industrialisation and achieving the structural transformation championed by Afreximbank.

“By driving regional value chain integration, the automotive industry directly aligns with our mandate to foster intra-African trade under the AfCFTA framework. Supporting this sector allows Afreximbank to catalyse high-impact investments, stimulate manufacturing capabilities, create skilled employment, and significantly reduce the continent's heavy reliance on vehicle imports. Investing in the African automotive ecosystem is not merely a financing opportunity, but a strategic imperative that accelerates economic diversification and establishes Africa as a competitive player in the global industrial economy,” Kanayo says.

Afreximbank had committed US$1 billion towards financing Africa’s automotive sector as part of its strategy to promote manufacturing, trade and industrial development. The bank was also championing a pan-African manufacturing ecosystem in which vehicle and component production would be linked through regional supply chains and trade.

Tarek Mosaad, President of AAAM, says agreement on the AfCFTA Rules of Origin provided a foundation for greater integration.

“With the AfCFTA Rules of Origin now agreed, the foundation for a more integrated automotive industry is in place. Our focus must shift to turning ambition into action by creating factories, strengthening supplier ecosystems, generating jobs, and increasing intra-African trade.”

AAAM identified three priorities: growing local content through regional value chains, making it easier to move automotive products across borders and ensuring Africa played a meaningful role in shaping the future of mobility.

Tarek cautioned that “investors are not looking at 54 separate African markets. They are looking at one integrated opportunity.”

Wamkele Mene, Secretary-General of the AfCFTA Secretariat, outlined three priorities for advancing the Strategy for the African Automotive Sector: developing investment-ready projects and competitive production locations, strengthening regional supplier networks and localisation, and establishing commercially viable regional production.

The AfCFTA Secretariat and AAAM signed a memorandum of understanding to strengthen cooperation in developing the industry. Its scope included automotive Rules of Origin, customs procedures, trade facilitation, policy and standards, capacity building, supplier networks, mineral beneficiation, investment mobilisation and emerging automotive technologies.

The Forum also saw the establishment of an Egypt-South Africa Business Council to develop bilateral trade and investment projects in priority sectors, including automotive, mining and mineral resources, renewable energy, agriculture and food production, pharmaceuticals, transport and logistics infrastructure.

The initiative was designed to leverage the Suez Canal and ports in both countries to facilitate trade between northern and southern Africa.