The African Export-Import Bank (Afreximbank) and the African Association of Automotive Manufacturers (AAAM) have signed a Memorandum of Understanding (MoU) for the financing and promotion of the automotive industry in Africa.
The President of Afreximbank, Prof. Benedict Oramah, and President of AAAM and Managing Director of Nissan Africa, Mike Whitfield, signed the MoU in early February, a statement issued by AAAM said.
According to the statement, the alliance aims to boost regional automotive value chains and financing for the automotive industry.
They also plan to support the development of enabling policies, technical assistance, and capacity building initiatives.
Oramah said, “The strategic partnership with AAAM will facilitate the implementation of the bank’s automotive programme which aims to catalyse the development of the automotive industry in Africa as the continent commences trade under the African Continental Free Trade Area (AfCFTA).”
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Under the terms of the MoU, Afreximbank and AAAM said they would work together to foster the emergence of regional value chains with a focus on value-added manufacturing created through partnerships between global Original Equipment Manufacturers (OEM), suppliers, and local partners.
The two organisations planned to undertake comprehensive studies to map potential regional automotive value chains on the continent in regional economic clusters, in order to enable the manufacture of automotive components for supply to hub assemblers.
The statement said, “To support the emergence of the African automotive industry, they will collaborate to provide financing to industry players along the whole automotive value chain.
“The potential interventions include lines of credit, direct financing, project financing, supply chain financing, guarantees, and equity financing, amongst others.”
“The MoU also provides for them to support, in conjunction with the African Union Commission and the AfCFTA Secretariat, the development of coherent national, regional and continental automotive policies, and strategies.”
The statement said the collaboration between Afreximbank and AAAM would be an opportunity to empower the aspirations of African countries towards re-focusing their economies on industrialisation and export manufacturing and fostering the emergence of regional value chains.
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The CEO of AAAM, David Coffey, described the signing of the MoU with Afreximbank as an exciting milestone for the development of the automotive industry in Africa.
“At the 2020 digital Africa Auto Forum, the lack of affordable financing available for the automotive sector was identified as one of the key inhibiters for the growth and development of the automotive industry in Africa and having Afreximbank on board is a game changer and a hugely positive development,” he added.
“It is wonderful to have a partner that is as committed as the AAAM to driving the development and growth of our sector on the continent; this collaboration will ensure genuine progress for our industry in Africa,” Coffey added.
