Accra, June 18, GNA – The African Association of Automotive Manufacturers (AAAM) and the African Continental Free Trade Area (AfCFTA) Secretariat have explored the potentials the Agreement holds for automotive policies for Africa which, in turn, drives industrialization.
They also discussed why the Rules of Origin are key in driving investment and confidence in Africa.
Mr Mike Whitfield, President of AAAM and Managing Director of Nissan Africa, said the finalization of the AfCFTA agreement and the Rules of Origin with respect to automotive were vital to the realization of the Association’s vision of building a successful automotive ecosystem.
Mr Whitfield speaking in a webinar organised by the two institutions, explained that it would lead to a sustainable industry of scale that created significant jobs, while assisting in the industrialisation of the automotive sector in Africa.
Topics discussed included the status of the automotive industry in Africa; the opportunities presented by the AfCFTA and the Pan African Auto Pact Vision and how this can fast track the development of the automotive sector in the context of the AfCFTA.
The rest are activities taking place on the continent to industrialize and grow the automotive sector– why a Pact can be a short-term reality and fast tracking the conclusion of the automotive Rules of Origin.
He said the event would enable all automotive industry role players, including policy advisors, business leaders and potential investors to gain great insight as they unpack various aspects of the potential of the African market and the opportunities it provides.
Mr David Coffey, Chief Executive Officer of AAAM, applauded the African Union for launching the AfCFTA, the largest free trade bloc in terms of participating countries, which would provide the scale that was required for a globally competitive African automotive sector.
“The political will is required to put significant policy reforms and trade facilitation measures in place to realise the benefit of the AfCFTA,” he said.
Mr Wamkele Mene, Secretary-General, AfCFTA Secretariat, said Africa Union was engaging African Countries on what they needed to do from the policy stand point in terms of Rules of Origin, what adjustment they needed to do to ensure investment.
He said Morocco has an ambition of having 65 per cent local content, South Africa has similar ambition of enhancing local content requirement to enable investment turning up in industrialisation.
He said in the next month “we want the governments across the continent to make sure that they reach agreement on Rules of Origin that makes sense from an investment perspective and that will be the key challenge going forward.”
“l think it is possible and we can get there with a minimal 40 per cent local content requirement or Rules of Origin, it is possible,” he added.
In simplistic terms, the Rules of Origin are a passport that ultimately enables goods to circulate – free of duty – within a free trade area (FTA) such as the AfCFTA, as long as these goods qualify as originating within the FTA.
The Rules define the criteria that must be met for a product to be considered as having its origin within the FTA.
He said countries would get the same or better level of investment South Africa had gotten over the years provided the local content requirement and industrialisation and broader policy environment were appropriate
GNA