Panelists see bright future for Africa’s automotive sector and youth start-ups
Panelists at a recent webinar to raise awareness on Africa’s premier trade event, the Intra-African Trade Fair (IATF2021), scheduled to hold next year in Kigali, Rwanda, have projected a bright future for Africa’s automotive sector and youth start-ups.
The panelists drawn from African Association of Automotive Manufacturers (AAAM), Afreximbank and the continent’s startup community believe despite low access to finance and infrastructure deficits, among other challenges, Africa has huge potential to be a robust market for service and products with a growing middle class and large population of young not ageing people.
The IATF2021 is to be held from 6 – 12 September 2021, under the theme ‘Building Bridges for a Successful AfCFTA.’ The webinar is second of five webinars hosted by Afreximbank in collaboration with the African Union tas part of awareness buildup for IATF2021.
Dave Coffey, CEO of the African Association of Automotive Manufacturers (AAAM) highlighted the huge potential of African markets to be the next major opportunity for the global and domestic automotive sector with its young demographic profile, rapid population growth and urbanisation, burgeoning middle class and technology all suggesting exponential growth in demand. He said: “We regard the ‘Pan African Auto Pact’ as the potential gamechanger for the development of the African automobile market, through its potential to connect African regions to create a harmonised portfolio with distributed value chains and manufacturing, started with a ‘coalition of the willing.”
In a second presentation on the African Automotive sector, Gainmore Zanamwe of Afreximbank’s Intra-African Trade Initiative, focused on the bright prospects for the sector through the further development of regional value chains. He said: “Through these initiatives, we could see the new vehicle sales increase from 1 million to 5 million sales a year across the continent.”
Afreximbank’s strategy for the Automotive industry includes:
- Automotive Financing – providing financing and risk-sharing to industry players and consumers;
- Regional Automotive Value Chains – Fostering the emergence of regional value hubs with focus on value-added manufacturing created through joint ventures between global Original Equipment Manufacturers, tier 1 suppliers and local partners; and
- Policy and Capacity Building – Supporting the setting of the right automotive policies and capacity building programmes.
Allan Majuru, CEO of ZimTrade, stressed the importance of Youth start-ups in driving growth in African economies, with their key advantages being their technology savviness, innovation, risk taking, early adopting and game-changing mentality, and their ability to work smart. To reach their potential, significant support is required in the form of capacity development and mentoring, networking, access to finance, supportive infrastructure, enabling policies and market linkages.
Emery Rubagenga, CEO and Founder of Ishango, examined the challenges facing Youth start-ups and SMEs in Africa which include access to finance, infrastructure deficits, the need for more countries to join Rwanda and Ghana in creating an enabling environment for start-ups, differential laws and regulations across the continent and significant competition. The African Continental Free Trade Area (AfCFTA) promises to provide exponential opportunities through its creation of a single liberalised continental market with free movement of both capital and people.
In addition to the immense trade and investment opportunities proffered by the AfCFTA, the event also highlighted the importance of attending the IATF2021 for all those involved in African trade and investments. IATF2021 will provide a unique and valuable platform for businesses to explore a single integrated African market of over 1.3 billion people with a combined GDP of over US$2.5 trillion.
The Trade and Investment webinar can be viewed here: https://www.youtube.com/watch?v=3O9jMevs9Mg&feature=youtu.be