By Onome Amuge.
Wamkele Mene, secretary general of the African Continental Free Trade Agreement (AfCFTA), has called on the need for Nigeria to take the initiative of diversifying into automobile production to bridge the vast gap of Africa’s population and growing demand.
Mene stated this during a keynote presentation at the 8th annual edition of the Zenith Bank International trade seminar on non-oil export themed “Nigerian Non-Oil Export Industry:The Present, The Future”, held recently at the Civic Centre, Victoria Island, Lagos.
Citing an estimate by AfCFTA, Mene pointed out that with only South Africa, Morocco, and Egypt producing cars, there is a five million per annum vehicle production void in the continent.
Mene noted that Nigeria can tap into this sector whilst capitalising on Afrexim’s $1 billion facility to countries who take on manufacturing of cars.
Mene noted that AfCFTA has identified a number of priority sectors, which it believes will enable the diversification into non-oil industry including the pharmaceutical sector, agriculture and agro-processing, transport and logistics, and the auto sector.
“In the auto sector again, we have an opportunity to accelerate the diversification of Africa’s economy,” he said.
According to the AfCFTA secretary general, Africa,which is 17 per cent of the global population, produces 900,000 units of passenger vehicles per year with its production dominated by South Africa, Egypt and Morocco.
On the other hand, he pointed out that India, similarly populated to the African continent, produces five million units of vehicles per year.
“By the year 2035, our estimates indicate that in order for us to meet domestic demand in Africa we have to produce five million units of vehicles per year,” he said.
Mene pointed out that the gap presents an opportunity for Nigeria to include the auto sector in its diversification strategy to not only gratify the demand for the auto sector,but also create jobs that drive industrialisation.
He emphasised that Africans auto sector is not going to be met by Egypt, Morocco, South Africa, nooting that there needs to be more countries that are producing vehicles for the African continent,creating jobs and innovation and driving industrialisation.
In his recommendations, Mene said immediate actions must be taken towards the automobile sector.
“I would suggest and recommend that the auto sector be closely looked at because we know that from every unit of investment on the assembly line to produce a vehicle there are four jobs that are created in the components manufacturing sector, whether it is lithium battery, manufacturing or any other kind of a component. So, as we talk about diversification value addition, let us consider the auto sector as one of the enablers for the diversification that we all want to see,” he suggested.
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