Experience has shown that the total supply chain for the automotive industry can be located across many economies. This is even more the case in economic blocs such as the EU where barriers to trade are reduced and logistics systems improved. As Africa starts in earnest a similar process of reducing trade barriers and improving logistics, the opportunities for smaller economies in blocks such as ECOWAS, SADC and the EAC to participate in the automotive industry supply chain, will grow. To the extent that the African industry is configured strategically, the greater will be the opportunities for all economies in Africa. Such configuration will start step-by-step and economy-by-economy, but Nigeria and South Africa – the two largest economies – provide a good start.

Success will depend on intelligently designed partnerships between and among governments, national investors and the global OEM – both assembly and componentry. Such a vision is already informing important initiatives to facilitate such an African partnership. A degree of coordination is needed and there needs to be coherence of approach. However, the process has to be pragmatic and accept that it is the competitive economics of this vast, technologically advanced industry and its leading OEM that shape the reality for sustained and intelligent state interventions through industrial policy partnerships.




Building an Automotive Industry in Africa

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