Trade financing institution the African Export-Import Bank (Afreximbank) has renewed its memorandum of understanding with industry organisation the African Association of Automotive Manufacturers (AAAM) to promote intra-African trade and investment in the continent’s automotive sector.

The key pillars of the agreement are regional automotive value chains, automotive financing and policy and capacity building.

“The agreement underscores the commitment of Afreximbank and AAAM to strengthening Africa’s industrialisation goals through strategic partnerships. By aligning financial innovation, policy support and value-chain development within the automotive sector, we are fostering intra-African trade and manufacturing,” says Afreximbank Trade Facilitation and Investment Promotion director Dr Gainmore Zanamwe.

“Afreximbank is committed to supporting the development of the automotive sector in Africa. Our commitment to this initiative demonstrates how Afreximbank’s resources and expertise can transform continental aspirations into tangible economic outcomes,” he says.

Further, the agreement is expected to catalyse industrialisation by spurring local automotive manufacturing, strengthening regional integration, improving trade flows, creating skilled jobs and reducing reliance on the import of second-hand vehicles across Africa.

“Afreximbank has been a phenomenal partner in our quest to drive growth and industrialisation of the automotive industry on the continent. Logistics, energy, skills development and financing mechanisms must keep pace with our ambitions.

“Afreximbank’s leadership is critical in this regard, but so too is the commitment of our governments to invest in infrastructure that connects factories to markets,” says AAAM president Martina Biene.

The renewed framework aligns AAAM’s strategic expansion ambition by positioning it to take advantage of Afreximbank’s continental reach and trade-promotion mandate. It fosters coordinated efforts to map and activate regional value chains, deploy auto-specific financing solutions and strengthen national and continental automotive policy environments.

Additionally, the agreement also envisages collaboration with institutions, including the African Union, the African Continental Free Trade Area Secretariat and African Organisation for Standardisation, to enhance trade facilitation, capacity building, harmonised standards and mobilisation of blended financing to catalyse industrialisation and sustainable growth in Africa’s automotive sector, she adds.

“We must unite with key stakeholders to enable affordable mobility in Africa. The implementation of affordable vehicle and asset financing will unlock the potential the continent has.

“Despite challenges, the opportunities are immense. With coordinated action, Africa can manufacture between 3.5-million and five-million vehicles a year by 2035, thereby creating jobs for our youth, strengthening local supply chains, and ensuring that the benefits of industrialisation are shared across our continent,” Biene says.