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Building on a Successful Automotive Industry through AfCFTA

According to a new report by the World Economic Forum — AfCFTA: A New Era for Global Business and Investment in Africa — global business will play a key role in boosting the industry by $12 billion by 2027 under the AfCFTA. The continent’s leadership is actively working towards improving the investment environment for the automotive sector specifically. There is significant political will by African governments and private sector players to develop automotive regional value chains because of the sector’s historic contribution to industrialisation. African automotive manufacturers will benefit from all the advantages of economies of scale; essential for the competitive manufacturing of automotives. Reduced tariffs across the continent for inputs like aluminum from Mozambique or rubber in Cote d’Ivoire will mean the African industry as a whole becomes more dynamic. The AfCFTA’s rules of origin will also help set common thresholds for value-added levels, and if these are progressively harmonised across regional communities, these more general and co-equal rules will help stimulate trade.

WEFORUM