Africa’s automotive opportunity depends on implementation

So says Victoria Backhaus-Jerling, CEO of the African Association of Automotive Manufacturers (AAAM).

In several countries, considerable work has gone into developing automotive policies, engaging industry and identifying interventions to establish or expand domestic automotive value chains. The next challenge is implementation.

For global automotive manufacturers and component suppliers making long-term investment decisions, a well-crafted policy signals intent. However, investment ultimately follows certainty. Companies need to understand how policies will be implemented, when they will take effect and whether the framework will remain consistent enough to support decisions that may stretch over decades.

Automotive manufacturing is particularly sensitive to this certainty. Assembly operations, supplier parks and component manufacturing facilities require significant capital, long planning horizons and confidence in future market conditions. Investors assess policy consistency, fiscal incentives, trade arrangements, infrastructure, market access, localisation requirements and the regulatory environment before committing capital.

Africa must therefore shift the conversation from policy development to policy execution. Encouragingly, progress is being made.

Kenya continues to advance its automotive policy framework. Its Automotive Bill has undergone public participation and further government processes ahead of consideration by Parliament. Kenya also launched its National Electric Mobility Policy in February 2026, covering electric-vehicle adoption, infrastructure, local manufacturing and investment.

Ghana provides another example of the journey from policy development towards implementation. The second phase of the Ghana Automotive Development Policy, covering 2026 to 2036, has largely been drafted, with the fiscal incentive framework identified as the outstanding component. The policy envisages deeper industrialisation, component manufacturing and the integration of electric and hybrid vehicles into the country’s automotive strategy.

Completing these processes matters. Clarity about incentives, localisation requirements and regulation allows investors to build business cases, seek board approval and plan factories, suppliers and employment. Uncertainty over implementation can delay investment decisions.

Nigeria is working towards legislative enactment of its National Automotive Industry Development Plan, with passage targeted during 2026. The proposed framework includes an automotive commission, development fund, local-content objectives, standards and licensing. Some implementation details, including localisation measures and investment-support mechanisms, still require greater clarity.

Other countries are at different stages. Tanzania has been working towards an automotive programme initially focused on buses, trucks, trailers and body building, supported by engagement with Afreximbank and the African Association of Automotive Manufacturers (AAAM). Ethiopia has considered manufacturing opportunities, while Côte d’Ivoire continues work towards implementing its automotive industry development programme.

These examples illustrate that Africa’s challenge is increasingly not whether we understand what needs to be done, but how quickly and consistently we can turn that understanding into action.

Political and administrative transitions are inevitable in democracies as Ministers and governments change, and national priorities evolve. However, industrial policy requires continuity beyond political cycles. An automotive plant cannot be planned around an electoral term, and a component supplier cannot make a long-term investment if the rules governing localisation, incentives or imports may change before that investment matures.

Governments must be able to respond to economic conditions, new technologies and national development priorities. Investors value a transparent process, reasonable transition periods and confidence that commitments will be implemented consistently.

The African Continental Free Trade Area (AfCFTA) makes this even more urgent. In February 2026, African Union Heads of State and Government formally adopted the automotive Rules of Origin for products under tariff headings 8701 to 8716, including a threshold of 40% African originating content. This is an important step towards creating the scale required for an integrated African automotive industry.

No single country needs to manufacture every vehicle component. Instead, countries can specialise in different areas, with one producing wire harnesses, another batteries or automotive electronics, and others tyres or seating systems, while established vehicle assembly markets provide the demand and scale that support the entire value chain.

Botswana’s work exploring opportunities from copper through to automotive wire harnesses demonstrates the potential of regional value-chain thinking. Namibia is also exploring component manufacturing and regional value addition.

Regional integration will work only if national policies connect with continental ambitions. Africa competes for automotive investment with markets across Asia, Latin America, Europe and the Middle East. Capital will gravitate towards markets where policy is clear, implementation is credible, and investors can reasonably calculate risk and return.

The continent has already done much of the difficult thinking. Governments, industry bodies, development finance institutions and the private sector have spent years developing frameworks for automotive industrialisation.

The next phase must be about execution. Every policy implemented, regulation clarified and incentive framework activated strengthens Africa’s investment proposition. Prolonged uncertainty, by contrast, increases investment risk and can cause projects to be postponed or directed elsewhere.

The message should not be that Africa needs more automotive policies. Africa needs to turn the policies it already has into factories, suppliers, skills, jobs and trade. That is how policy ambition becomes industrialisation, Victoria concludes.