By Mpho Dipela, Chairman and shareholder of Legacy Motor Group
By Mpho Dipela, Chairman and shareholder of Legacy Motor Group

Accounting for less than 1% of global production, Africa’s role in the global automotive industry is limited, with Morocco and South Africa dominating this space. 

Yet according to a 2021 ODI report, the automotive industry on the continent is predicted to grow to the value of $42.05 billion by 2027. Ultimately, even though South Africa and Morocco are two of the largest exporters on the continent, the rest of Africa remains a major net importer of vehicles and parts, including used vehicles from the rest of the world.

But as a 2021 report published by the United Nations Environment Programme (UNEP) confirmed, millions of used vehicles exported from Europe, the United States and Japan to developing countries are of poor quality, while also adding significantly to the African continent’s carbon footprint. This significantly hampers efforts to mitigate the effects of climate change.

As many as four million used vehicles are imported into Africa annually. Likewise, the World Economic Forum estimates that Africa is home to as much as 40% of the world’s used vehicles, of which 80% do not meet basic emission standards.

At a recent Intra-Africa Trade Fair (IATF2021), Alec Erwin, the former South African Minister of Public Enterprises, thus warned that dumping old vehicles in Africa will impede progress in addressing climate change and result in the failed agenda of consecutive United Nations climate change conferences or COPs.

Notably, according to the UN, the transportation sector accounts for nearly one-quarter of global greenhouse gas emissions. This is especially as developed countries have increasingly sent their used vehicles to developing countries – a trend enabled by a lack of effective standards and regulations, allowing old, polluting, and unsafe vehicles to be sold in Africa.

Africa needs to ensure that our market does not become saturated with these vehicles by implementing stronger policies to ensure that imported vehicles are better regulated, and by preventing countries from exporting cars with failing safety standards. Kenya stands out as a prime example in this regard, refusing to allow vehicles older than 10 years to be imported into the country for sale. All African countries should follow suit and ensure that this system is phased out.

Likewise, European governments and automotive industries should be held to account in ensuring that appropriate systems are put in place to recollect and recycle vehicles at their ultimate end of life. This is especially critical in the run-up to 2035 when the European Union’s ban on the sale of new fossil fuel-powered cars is expected to take place, which will gradually see more vehicles with traditional internal combustion engines enter the second-hand market.

Furthermore, if the continent was able to convert demand for used vehicles from Europe into demand for affordable new vehicles produced in Africa itself, then countries such as South Africa and Morocco could benefit greatly from establishing and developing new vehicle assembly plants.

For African automotive industries to thrive, they need preferential access to both domestic and regional markets to boost sales, with further support under the African Continental Free Trade Agreement. Likewise, ahead of 2035, African industries need to seize the opportunity to become manufacturing hub for the production and export of electric vehicles, rather than relying on imports from overseas.  

This would represent a significant coup for African automotive industries in terms of job creation, economic growth, and minimising the damage caused by air pollution – which is why governments, Original Equipment Manufacturers (OEMs) and dealers must work together to create sustainable solutions and chart the way forward.