Afreximbank supports ARSO in the harmonisation of African automotive standards
African Export-Import Bank (Afreximbank) is supporting the African Organisation for Standardisation (ARSO) to harmonise standards in the automotive sector in Africa in order to facilitate an accelerated development of the sector across the continent.
The harmonised standards are to be adopted by individual African countries, facilitating cross-border trade, under the African Continental Free Trade Agreement (AfCFTA).
There are 1432 international automotive standards worldwide largely developed by the International Organisation for Standardisation and the American Society for Testing and Materials. To initiate the process of developing African Automotive standards, ARSO prioritised what are referred to as “Whole Vehicle Standards” encompassing motor vehicle components, accessories, and replacement parts.
It is anticipated that some 250 standards will need to be harmonised based on the basic components, accessories and replacement parts which are necessary to keep a vehicle safe and operational. ARSO had initially targeted 18 basic standards based on the demands of the industry to facilitate the development of the automotive sector on the continent. Since inception of the project in 2019, ARSO has, with the support of Afreximbank, been successful in harmonising 42 international standards, well above the targeted 18.
ARSO is planning to launch the completed harmonised African Automotive standards by June 2021 in six countries, namely Rwanda, Ghana, Nigeria, Malawi, South Africa, and Zimbabwe.
An initial grant provided by Afreximbank was critical in highlighting the importance of harmonising standards in the automotive sector and opened the way to other partners to come on board. The Physikalisch-Technische Bundesanstalt in Germany has now agreed to fund the second phase, targeting a further 100 standards with the goal of reaching 250 standards by the end of 2022.
Prof. Benedict Oramah, President of Afreximbank, commented: "In line with Afreximbank's mandate to drive industrialization and intra-African trade, we are delighted to be supporting the harmonisation of automotive standards on the continent as a crucial step towards the creation and development of a vibrant automotive industry in Africa. Our support has enabled achievement of substantial progress within a short period of time. This is part of Afreximbank’s drive to establish and upgrade standards in various sectors working with diverse partners to support intra-African trade and the structural transformation of African economies under the AfCFTA."
Afreximbank has adopted a comprehensive automotive strategy under which the Bank is supporting the development of automotive regional value chains, automotive financing, industrial policy and capacity building. The focus on automotive is driven by the Bank’s recognition of its capacity to foster regional value chains and high-quality jobs. The Bank will also organise an automotive show as part of the intra-African Trade Fair, which will give a platform to auto manufacturers, assemblers, Original Equipment Manufacturers (OEMs) and component suppliers to exhibit their products and interact with potential buyers and suppliers.
Dr. Hermogene Nsengimana, ARSO’s Secretary General, said: “Harmonisation of Automotive sector standards is a collective effort of ARSO Members States, private sector players and regulatory agencies. The harmonised standards will pave the way for the elimination of tariff and non-tariff barriers to widen the markets for Africa’s automotive industry under the AfCFTA by creating a reliable network of automotive components and strengthening environmental performance through harmonization of standards for fuels, roadworthiness, transportation of dangerous goods, power driven vehicles and homologation. We commend our partnership with Afreximbank in the harmonization of standards on the continent”.
David Coffey the CEO of the African Association of Automotive Manufacturers (AAAM) said: “ARSO needs to be complimented for the work that they have done in harmonising the 42 automotive standards to date. These are critical in facilitating the development of the automotive industry on the continent.”
“The AAAM vision is to work with strategic partners, such as Afreximbank and ARSO to develop a Pan-African Auto Pact, which conceptualises the establishment of an African Automotive Development Plan, built around a few assembly hubs in the Central, South, East, West, and North of Africa. These hubs are then supported by a spread of value-adding activities in neighboring economies. This will ensure that there is industrial development in all participating countries, and that associated economic benefits are distributed among these countries. Harmonised African Automotive standards are essential for the long-term success of the Auto Pact and we applaud the work that ARSO and Afreximbank are doing to help achieve that.”
The African Association of Automotive Manufacturers (AAAM) recently signed a MOU with Afreximbank paving the way for a collaboration aimed at supporting the emergence of a dynamic African automotive industry. 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 Global Original Equipment Manufacturers, suppliers, and local partners.