Minister Parks Tau: Africa Automotive Investment Forum

Minister Parks Tau address at the Africa Automotive Investment Forum, hosted by Afreximbank at Rixos Hotel Alamein

Greetings to the Moderator, Dr Ahmed Fikry
His Excellency Dr Mohamed Farid Saleh
Secretary General Wamkele Mene
Ms Kanayo Awani: Executive Vice-President IAED, Afreximbank
President of the African Association of Automotive Manufactures (AAAM)
Captains of Industry
Investors

Ladies and gentlemen

Why are we here?

During the G20 concluding remarks by President Cyril Ramaphosa, he emphasized that South Africa used its G20 Presidency to reinforce our shared humanity and to foster collaboration and goodwill. This statement is significant today, because the panel discussion is focused on discussing:

• Policy issues in building African automotive investment corridor.
• Vehicle financing and affordability

Answering if New Energy Vehicles are the future

Key messages

Collaboration remains the important ingredient to grow the automotive sector in Africa.
We must use this forum to move from ambition to implementation.
Governments, financiers, OEMs, suppliers and investors to work with us to build bankable projects, connect African firms into regional value chains, beneficiate our critical minerals on the continent, and expand two-way investment in automotive manufacturing.
our task is to crowd in capital, deploy project-preparation capacity, strengthen intra-African trade infrastructure, make greater use of AfCFTA instruments, and ensure that continental integration supports real factories, real suppliers, real jobs and real exports. Through the AfCFTA, Africa can manufacture more, trade more, invest more and build a competitive automotive industry that creates jobs, supports industrialisation and strengthens our place in global markets.

Understanding the African context. What are they numbers telling us?

The African continent produced about 1.23 million vehicles overall. This represented only about 1.3 per cent of global production, against worldwide output of approximately 96.4 million vehicles.
Africa still accounts for a small share of global automotive production, but the continent has strong foundations to build on.

In 2025, South Africa produced approximately 618,077 vehicles, while Morocco announced in Dec 2025 that the country reached 1 million vehicle production. Together, these two economies accounted for more than 91 per cent of Africa’s vehicle production.

The AfCFTA Automotive Fund, supported by Afreximbank’s US$1 billion facility for local content development, gives practical expression to this ambition, while continental automotive work points to a longer-term objective of producing 4–5 million vehicles in Africa by 2035, including new energy vehicles and related components.

Proposal for an Automotive Pact Between SACU (The Southern African Customs Union) and Egypt - A SACU-Egypt Auto Pact.

The concept of automotive pacts within Africa has been under consideration for some time, including the work undertaken by the African Association of Automotive Manufacturers (AAAM). Industry has long argued that, for Africa to build a viable and competitive automotive manufacturing sector, leading automotive economies on the continent will need to cooperate in a more structured way through industrial and trade arrangements that promote complementarities rather than fragmentation.

Within SACU, this thinking has informed consideration of possible automotive pacts with key African partners, including Egypt and Algeria. The proposal for these Industrial Participation Agreements (IPAs) was presented to SACU structures as part of broader discussions on regional industrialisation, value chain development, and strategic responses to changes in the global trading environment.

SACU has noted the increasing importance of developing resilient African production systems in light of heightened protectionism, supply chain vulnerabilities, and growing market access uncertainty in traditional markets. Against this backdrop, SACU sees value in exploring structured partnerships with major African economies such as Egypt to strengthen developmental integration and expand intra-African trade.

SACU-Egypt Automotive Pact presents the following opportunities:

• Support economies of scale in production and trade.
• Encourage complementary production patterns rather than duplication of small scale production of similar competing models in separate markets.
• Increase intra-Africa trade in new vehicles and components.
• Facilitate trade diversion towards African suppliers, where commercially viable.
• Create a viable basis for supplier development and feeder industry growth.
• Strengthen Africa’s position in future-oriented automotive segments, including batteries, electric vehicles, and new energy vehicle value chains.

  Strategic pillars of the Pact:

  Pillar 1: Industrial and Investment Cooperation: This pillar could focus on aligning policy support measures and promoting investment cooperation in automotive assembly, components, feeder industries, batteries, and electric mobility-related sectors. Possible areas of discussion could include investment promotion and facilitation; supplier and localisation programmes; industrial incentives and support mechanisms; technology transfer and skills cooperation; and collaboration between OEMs, component producers, and relevant institutions.

  Pillar 2: Regulatory, Standards and Administrative Cooperation: The pillar could focus on reducing non-tariff and procedural barriers that affect automotive trade and production. Possible areas of cooperation include:
  Definition and treatment of automotive product categories;
  Standards and conformity assessment;
  Homologation systems;
  Customs and trade administration procedures;
  Facilitation of trade in original equipment and components; and
  Mechanisms for technical problem solving and regulatory dialogue.

  Pillar 3: Trade and Value Chain Arrangement: This pillar could focus on preferential and developmental trade arrangements that support inter-regional production. Possible areas for discussion may include:
  Preferential market access for selected vehicles and components;
  Treatment of CBUs, CKDs, SKDs and components within agreed programmes, where appropriate;
  Rebates and duty-credit arrangements;
  Recognition of value addition in a form analogous to cumulation;
  Identification of priority products for cooperation; and
  Transitional arrangements for sensitive products, where necessary.

  Understanding the South African context 

  South Africa's automotive industry is one of the continent’s most established manufacturing platforms and remains central to our industrialisation agenda.

  The Industrial Development Strategy emphasis on the need to build productive capacity, deepen localisation and support key sectors such as automotive manufacturing, green industries and critical minerals beneficiation.

South African Automotive Master Plan 2035, government and industry are working together to expand production, deepen local content, increase participation by black-owned and women-owned firms, strengthen supplier capability and use regional markets as a springboard for sustained industrial growth. 

This approach is fully aligned with the outcomes emerging from Afreximbank’s most recent Annual Meetings, which emphasised intra-African trade, industrialisation, value addition, mobilisation of capital, regional value chains, trade-enabling infrastructure, digital trade tools, payment systems and the conversion of AfCFTA commitments into investible projects.

South Africa is seeking investment across the full automotive value chain. This includes:
vehicle assembly for passenger vehicles, light commercial vehicles, buses and trucks.
tier-one, tier-two and tier-three component manufacturing.

tooling, moulds, dies and precision engineering; electronics, software, telematics and mobility services.

testing, homologation and standards infrastructure.
logistics, ports, rail, road corridors and industrial parks.
research, development, skills and technology transfer.

South Africa is seeking investment in catalytic segments such as tyres, glass, seating systems, wiring harnesses, catalytic converters, drivetrain components, body panels, plastics and advanced materials. These are areas where African suppliers can be integrated more deliberately into original equipment manufacturer procurement systems and where localisation can generate employment, technology transfer and export earnings. A central reason for investors to commit capital at scale is long-term policy certainty.

Through the South African Automotive Master Plan 2035, the Automotive Production Development Programme(APDP) and the AfCFTA framework, South Africa is working to provide that certainty, enabling firms to plan production, supplier development, skills investments and export strategies with confidence.

South Africa's trade agreements, especially the AfCFTA, open markets, support regional value chains and give investors confidence that products made in South Africa can reach the continent and the world. Together, they help turn policy into factories, investment, exports and jobs.

South African firms are ready to invest outward into African markets in assembly, components, dealerships, after-sales services, logistics, charging infrastructure, battery value chains, industrial park development and supplier partnerships. These investments can support demand creation, reduce reliance on imported used vehicles, strengthen standards and safety, and build African brands and suppliers capable of serving continental and global markets.

Recognise Egypt

Egypt as a particularly important partner for several reasons.

Egypt is one of Africa’s largest and most diversified economies, with substantial industrial capacity, a large domestic market, and a strong geographic position linking Africa, the Middle East, and Europe.

Egypt is an established automotive market with significant scope for further growth in assembly, components, feeder industries, and emerging electric mobility segments.

Egypt has introduced an automotive policy framework that creates new opportunities for industrial partnerships. The Egyptian Automotive Industrial Development Programme (AIDP) introduced in 2022, includes measures to localise production, support feeder industries, promote electric vehicle-related industries, and attract investment into automotive manufacturing. SACU notes that this policy direction aligns in important respects with South Africa’s Automotive Production and Development Programme (APDP) and broader SACU industrialisation aspirations.

Transition to NEV

South Africa recognises that global automotive demand is shifting towards electric, hybrid and hydrogen-enabled mobility. As a result, the Electric Vehicle (EV) White Paper was developed in 2023 to support this transition. Our response is to support the retooling of existing production platforms, while building new capabilities in:

• electric vehicle assembly,
• battery mineral processing,
• battery precursor materials,
• cell and pack manufacturing,
• charging infrastructure,
• power electronics,
• recycling and
• second-life battery applications.

  SACU, SADC and the broader continent are endowed with critical minerals such as platinum group metals, manganese, nickel, cobalt, copper, lithium, graphite, iron and rare earth elements. The strategic imperative is clear: Africa must beneficiate these endowments on the continent and convert mineral wealth into manufactured products, skilled jobs and export earnings.

  The global shift to electric vehicles is accelerating. The International Energy Agency reports that electric car sales exceeded 20 million in 2025—about one in four new cars sold—while 2024 production reached 17.3 million units, over 70 per cent from China.

  EVs represented about 5 per cent of global car stock and displaced 1.2 million barrels of oil per day, with sales projected to reach 55 million by 2035. For Africa, this underscores the need to build capacity in EV assembly, battery beneficiation, components, charging infrastructure, grid readiness and skills.

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