Africa’s Automotive Industry: Potential and Challenges

African Development Bank GroupAfrica s Automotive Industry: Potential and ChallengesWorking Paper SeriesAnthony Black, Brian Makundi and Thomas McLennanIndustrialise African 282 September 20173 Working Paper No 282 Abstract The low level of industrialisation is a major problem in africa . Many analysts have argued that lack of structural change during the phase of economic expansion since 2000 will impede future growth prospects due to the ongoing reliance on commodities. This in turn has serious consequences for the ability to expand employment. This paper outlines the limitations of industrial development in africa in recent decades and briefly explores the various industrialisation options. It then goes on to use the example of the Automotive industry to examine both the possibilities and pitfalls facing the development of this important sector. The Automotive industry is a relatively sophisticated industry, but with sub-Saharan africa s rapidly expanding market and Automotive trade deficit of $ billion, it is important that ways are found to efficiently attract investment especially into parts of the sector, which are more appropriate for lower-income countries.

Africa (UNECA) refers to this as ‘deindustrialisation’ (UNECA, 2015) and in a sense this is the case. However, it is important to note that manufacturing has been growing in absolute terms. Table 1: Overall and sectoral GDP growth in Africa (percentage per annum) Growth 1961-1979 1980-1999 2000-2012 GDP 4.9 2.4 4.9

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  Growing, Africa

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