• Afreximbank, AAAM renew deal to boost Africa’s auto industry

• Partnership targets value chains, financing, and policy support

• Africa’s vehicle fleet projected to more than double by 2050

The African Export-Import Bank (Afreximbank) has renewed a memorandum of understanding with the African Association of Automotive Manufacturers (AAAM) to boost intra-continental trade and investment in the automotive sector. The partnership aims to establish regional value chains, improve sector financing, and strengthen related policies and capabilities.

Driven by population growth and the rise of middle-class consumers, Africa’s annual vehicle demand has increased in recent years. A study presented this year at the World Economic Forum found that the continent has an average annual demand for 2.4 million passenger cars and 300,000 commercial vehicles. The highest demand is in countries such as South Africa, Egypt, Morocco, and Nigeria.

However, due to limited capacity in the local industry, the market remains heavily dominated by imports, with nearly 80% of vehicles being used cars. Local production, led by Morocco, South Africa, and Egypt, remains marginal and is mostly exported.

According to the German consulting firm Africon, Africa currently has about 55 million vehicles on its roads, a fleet expected to grow by 214%, reaching 118 million units between 2025 and 2050. For Gainmore Zanamwe, Director of Trade Facilitation and Investment Promotion at Afreximbank, creating a local value chain should catalyze industrialization, strengthen regional integration, improve trade flows, create jobs, and reduce used vehicle imports.

Henoc Dossa