The Coega Development Corporation (CDC) announced it is extending its advisory services and expertise in the automotive industry to Senegal.
CDC Head of Marketing, Brand and Communications, Dr Ayanda Vilakazi: “Final negotiations between Senegalese Investment Agency (PAIMRAI) and the CDC have recently concluded with the CDC and Automotive Investment Holdings (AIH) being appointed to elaborate a strategy for the development of the automotive industry in Senegal.”
Vilakazi said the sub-Sahara Africa automotive sector currently accounts for less than 3% of global production, against 30% in China, 22% for Europe and 17% for North America.
“The motorisation rate in this region was very low in 2018, with 42 cars per 1,000 inhabitants, against 837 in the United States, 173 in China and 214 in South Africa, for a world average of 180 cars per 1,000 inhabitants. This rate hardly exceeds 3% in Senegal, which means that only 30 people out of 1,000 own a private vehicle,” Vilakazi said.
Apart from Nigeria and Ghana, the automotive industry remains nascent in the member countries of the Economic Community of West African States, whose process of industrialisation faces the threat of used car imports from Europe, Japan, United States, Canada and other countries.
“The sub-regional and regional integration, through the development of upstream and downstream links in the automotive industry value chain, will stimulate industrialisation and competitiveness throughout Africa,” the CDC said.
According to research conducted by Dakar’s Foreign Trade Office, about 100,000 vehicles are imported to the country every year, which require constant replacement of parts due to difficult climate and infrastructural conditions. Senegal imports almost all spare parts. However, a strong focus for the government is to encourage the automotive industry in the country. It is an important driving force for Senegal. Stringent environmental regulations on pollution and carbon emissions are necessitating heavy investments.
“The Senegalese Automotive Industry Strategy developed by the CDC and AIH will provide a comprehensive analysis of the automotive industry in Senegal, its potential and the upstream and downstream linkages that can be developed with countries such as South Africa and Morocco, which are the leading vehicles manufacturers in the continent,” the CDC said.
Collaboration in Africa’s automotive industry is key
The appointment of the CDC sees the organisation expanding its project footprint throughout the continent, with projects currently in Zimbabwe, Cameroon for the Central African Republic and now Senegal.
Drawing from 21 years of expertise in project managing mega and complex infrastructure projects in South Africa for the public and private sector, the Coega Special Economic Zone (SEZ) has successfully developed its Automotive Zone and attracted investment exceeding $895 million.
CDC Global Market Manager Nkuli Mxenge-Mayende said he encouraged collaboration with the rest of the continent. He believes collaboration will promote working together, championing and driving forward implementation of free trade across the borders. He also believes that at a time like this we should take advantage of the supply chain networks and technological innovation within the industry.
“We believe that the African Continental Free Trade Area (AfCFTA) will provide investors with easy access to new, rapidly developing markets while it has the potential to lift 30 million people out of extreme poverty but achieving its full potential will depend on significant policy reforms and trade facilitation measures,” said Mxenge-Mayende.
The Smarter Mobility Africa summit held in October championed the idea of collaboration and working together under the principles of Ubuntu – I am because you are. The opening panel discussion looked at how the Africa Free Trade agreement can foster electric vehicle standardisation across the continent.