African automakers and Afreximbank sign MoU to boost investment – The Sun Nigeria



The African Import-Export Bank (Afreximbank) and the African Association of Automobile Manufacturers (AAAM) have entered into a Memorandum of Understanding (MoU) for the financing and promotion of the automotive industry in Africa.
Prof Benedict Oramah, Chairman of Afreximbank and Mike Whitfield, Chairman of AAAM and Managing Director of Nissan Africa, signed the MoU in early February, formalizing the basis for a partnership to boost regional automotive value chains and financing of the automotive industry while supporting the development of enabling policies, technical assistance and capacity building initiatives.
Prof Benedict Oramah, Chairman of Afreximbank, said that “the strategic partnership with AAAM will facilitate the implementation of the Bank’s automotive program which aims to catalyze the development of the automotive industry in Africa as the continent begins to trade within the framework of the African Continental Free Trade Area (AfCFTA) ”.
Under the terms of the MoU, Afreximbank and AAAM will work together to foster the emergence of regional value chains with a focus on value-added manufacturing created through partnerships between Original Equipment Manufacturers (OEMs) ), suppliers and local partners. The two organizations plan to undertake in-depth studies to map potential regional automotive value chains on the continent into regional economic clusters, to enable the manufacture of automotive components for supply to hub assemblers.
To support the emergence of the African automotive industry, they will collaborate to provide finance to industry players along the automotive value chain. Potential interventions include lines of credit, direct finance, project finance, supply chain finance, guarantees and equity finance, among others.
The MoU also provides that they support, in collaboration with the African Union Commission and the AfCFTA Secretariat, the development of coherent national, regional and continental automotive policies and strategies. With an integrated market under the AfCFTA, an abundant and cheap labor force, rich natural resources and a growing middle class, African countries are increasingly focusing their attention on supporting the emergence of their automotive industry. Therefore, the collaboration between Afreximbank and AAAM will be an opportunity to strengthen the aspirations of African countries to refocus their economies on industrialization and export manufacturing and to foster the emergence of regional value chains.
“The signing of the Memorandum of Understanding with Afreximbank is an exciting step for the development of the automotive industry in Africa. At the Digital Africa Auto Forum 2020, the lack of affordable financing available for the automotive sector was identified as one of the main hindrances to the growth and development of the automotive industry in Africa. development, ”commented David Coffey, CEO of AAAM.
“It is wonderful to have a partner as committed as AAAM to spur the development and growth of our sector on the continent; this collaboration will ensure real progress for our industry in Africa, ”added Mr. Coffey.
Other areas covered by the MoU include working with the African Union and the African Organization for Standardization to harmonize automotive standards across the continent and the development of an automotive-focused training program for the public and private sectors.

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