13 Sep 2023

Regional automotive value chains as endorsed by Afreximbank’s Automotive Programme stands to boost Botswana’s economic diversification drive.

The Executive Director of Export Development and Promotion at the Botswana Investment and Trade Centre,Mr Temo Ntapu, said Afreximbank automotive programme focused on catalyzing the development of the automotive industry in Africa as the continent commences trade under the Africa Continental Free Trade Area (AfCFTA) agreement.

Mr Ntapu said the programme aimed at leveraging the bank’s unique status as an investment-grade-Pan-African Development Finance Institution (DFI) to provide tailor-made financial and non-financial products and services.

He said the programme was founded on three strategic pillars and at supporting the emergence of a viable and sustainable automotive industry in Africa.

Mr Ntapu said the first pillar addressed regional automotive value chains and focused on fostering emergence of regional value hubs with focus on value-added manufacturing, created through joint ventures between global Original Equipment Manufacturers, Tier 1 suppliers and local partners.

He said the strategic pillar two of policy and capacity building focused on supporting the setting of the right automotive policies and capacity building programmes.

He also said pillar three sought to provide financing and risk-sharing to industry players and consumers.

Mr Ntapu said the programme provided for trade facilitation, export development, training and advisory services, as well as market information services to the automotive industry.

He said the programme was eligible to public entities and reputable private sector enterprises interested in setting up automotive projects within Afreximbank’s member countries, including Botswana.

Mr Ntapu also said a harmonious employer-employee relations and the low degree of industrial action positioned Botswana as a favorable chain in the automotive supply chain as uninterrupted supply of components had become one of the most crucial parts of the global automotive industry.

As member of SACU, Botswana enjoyed duty-free access to the South African market, providing Botswana-based component manufacturers a competitive advantage over exporters from Asia, Europe and North America, he said.

Botswana had managed to increase its exports tenfold in the past 20 years and controlled half of South Africa’s ignition wiring import market.

The government’s support for leather and logistics provided linkages for the automotive sector and were expected to lower input and transport costs.

Good governance, absence of corruption and well-run government reduced the transaction costs for business in Botswana and increased the certainty of the operating environment, he said.

Mr Ntapu said Botswana had proximity to largest automotive market in Africa, citing that South Africa’s automotive sales stood at approximately 644 500 units in 2014 and were expected to increase in the short to medium term, increasing the demand for replacement parts. Ends