An agreement on Automotive associations was signed between 12 sectors virtually. It was done on 16 February while the African business forum 2022 and Europe so the African Automotive industry could develop. There are many hurdles to growth in the industry of Africa, including Namibia. For example, includes a lack of capital to invest, African countries' inability to communicate with other countries properly, unfair trade policies, and continuous market fragmentation.
Achieve production levels of up to 1 to 5 million units and make African regions' relations better, it can be done through the African auto pact.
The pan African trade got some support from the (AFCFTA) African continental Free trade area. There were more opportunities to invest in the Automotive sector, by which it was easier to face the African-European dialogue between policymakers and valuable stakeholders. A joint group was made to develop MOU among the European and African automotive associations. The European and African union was supported as it was led by (AAAM) African Association of Automotive Manufacturers and had support from two other associations, which were (VDA) German Association of Automotive industry and (Afrika-Verein) German-African Business Association.
The MOU supports the fact to contribute to developing the Automotive sector in Africa. So this could lead to chances of having quality jobs. While also supporting the term of investing to support market integration and innovation. The safe mobility and joint creation of models standardization. It is being decided to advance sustainability while considering digital solutions and alternative powertrains. So this can develop a solution that is affordable to buy an African vehicle from the market.
The MOU has 7 major key rules for the 12 organizations to work together; the rules are:
The permanent round table meetings of EU, AU, and industry associations. It aims to establish a European-African Business Network to help the dialogue between Africa and Europe.
Telling EU and African countries to use the agreement for better trade will lead to better business opportunities.
In the global market, by the agreement, African companies will have better infrastructure, more capital, and the ability to run a company while competing.
The MOU asks the EU to raise its support for the free trade Area of Africa so it could favor Africa’s growth of the Automotive market.
The MOU requests government support to provide funds and give better priority to establishing Pan-African production.
It wants the EU to support the development financially so that it can be sustainable and will increase mobility.
Also, asking public authorities for programs and financial research support.
“In Africa, improvement of trade and investment climate can only be done together .” Said David Coffey, the CEO of AAAM, after signing the MOU.