Automotive trade in Africa offering huge opportunities

The 3rd Quarter Automechanika Johannesburg CEO Breakfast recently revealed the spectrum of explorable business opportunities for the automotive aftermarket and the commercial vehicle sector in Africa.

24 Frank Mes1

Leading the way with his opening address was Deputy Head of Mission of the German Embassy in SA, Enrico Brandt, who attested to the strong German business presence in South Africa and particularly, the motor industry, at both OEM and aftermarket levels.

He stated that the dynamism of the motor industry was necessary to master the effects of transformational challenges. He noted the necessity of a close and continuing interface between the industry and government to ensure the recognition of its importance to ensure the sustainability of the motor industry.

Ronel Oberholzer (photo), Head of sub-Saharan Africa Economics at S&P Global Market Intelligence, supported by colleague Economist, Lerato Ntuli, delivered a riveting presentation on world trade patterns. She homed in on Africa, where the recently implemented African Continental Free Trade Area (AfCFTA, established by the 55 members of the African Union with 54 member states having signed the Agreement) is set to make a huge difference in opening free trade opportunities on the Continent.

Although sub-Saharan Africa represents only 2% of world trade, the AfCFTA is the largest free trade area globally. Of the top five trade areas in Africa, South Africa was, in 2023, the largest trade area at 55% of all trade (up from 52% in 2015) followed by Egypt (12%), Mozambique (12%), Côte d’Ivoire (11%) and Nigeria (10%). Ronel indicated that there are significant impediments to trade expansion in many regions owing to insufficient infrastructure and security issues which, if resolved, could see rapid and exponential trade growth in the AfCFTA.

Of particular importance for the motor industry is the fact that overland trade in the AfCFTA constituted 61% of all trade in 2023, followed by seaborne (36%) and airborne (3%) trade. “The very nature of overland trade holds huge opportunity for commercial vehicle manufacturers and the automotive aftermarket to supply and serve the needs of the various regions within the AfCFTA and is an aspect which holds enormous potential benefit to the motor industry,” she said.

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