Afreximbank pledges support for ARSO in harmonising automotive standards in Africa

The Export-Import Bank (Afreximbank) has pledged support for Organisation for Standardisation (ARSO) harmonising standards for automotive sector on the continent.

This is against the backdrop of plans by  ARSO  to inaugurate the  completed harmonised Automotive Standards by June Nigeria,  Rwanda, Ghana, Malawi, South Africa and Zimbabwe.

Afreximbank a statement  on Tuesday Cairo, Egypt said harmonised standards would facilitate an accelerated development of the sector across the continent.

It added harmonised standards were to be adopted by individual countries, facilitating cross-border trade, under the Continental Free Trade Agreement (AfCFTA).

The bank said that there were 1,432 international automotive standards worldwide,  largely developed by the International Organisation for Standardisation and the American Society for Testing and Materials.

It said that to initiate the process of developing African Automotive standards, ARSO prioritised “Whole Vehicle Standards” encompassing motor vehicle components, accessories and replacement parts.

“It is anticipated that some 250 standards will need to be harmonised based on the basic components, accessories and replacement parts which are necessary to keep a vehicle safe and operational.

“ARSO had initially targeted 18 basic standards based on the demands of the industry to facilitate development of the automotive sector on the continent.

“Since inception of the in 2019, ARSO has, with the support of Afreximbank,  been successful in harmonising 42 international standards, well above the targeted 18.”

The bank said that an initial grant provided by it was critical in highlighting the importance of harmonising standards in the automotive sector and opened the way to other partners to on board.

It added Physikalisch-Technische Bundesanstalt in Germany had agreed to fund the second phase, targeting a further 100 standards with the goal of reaching 250 standards by the end of 2022.

According to the bank,  it  has adopted a comprehensive automotive strategy under which it is supporting the development of automotive regional value chains, automotive financing, industrial policy and capacity building.

It said that  the focus on automotive was driven by the bank’s recognition of its capacity to foster regional value chains and high-quality jobs.

It would also organise an automotive show as part of the intra-African Trade Fair, which would give a platform to auto manufacturers, assemblers, Original Equipment Manufacturers (OEMs) and component suppliers to exhibit their products and interact with potential buyers and suppliers.

Prof. Benedict Oramah, President of the bank  said that in line with its mandate to drive industrialisation and intra-African trade, it was delighted to be supporting the harmonisation of automotive standards on the continent as a crucial step toward  creation and development of a vibrant automotive industry in Africa.

“Our support has enabled achievement of substantial progress within a short period of time.

“This is part of Afreximbank’s drive to establish and upgrade standards in various sectors with diverse partners to support intra-African trade and the structural transformation of African economies under the AfCFTA.”

Dr Hermogene Nsengimana, ARSO’s Secretary General said harmonisation of automotive sector standards was a collective effort of ARSO Members States, private sector players and regulatory agencies.

He added that the harmonised standards would pave  way for elimination of tariff and non-tariff barriers to widen the markets for Africa’s automotive industry under the AfCFTA.

This, he said, would be by creating a reliable network of automotive components and strengthening environmental performance through harmonisation of standards for fuels, road worthiness, transportation of dangerous goods, power driven vehicles and homologation.

“We commend our partnership with Afreximbank in the harmonisation of standards on the continent,” he said.

David Coffey, the CEO of the African Association of Automotive Manufacturers (AAAM), said ARSO needed  to be complimented for the work that they had  done in harmonising the 42 automotive standards to date.

He said that these were critical in facilitating  development of the automotive industry on the continent.

“The AAAM vision is to work with strategic partners, such as Afreximbank and ARSO to develop a Pan-African Auto Pact, which conceptualises the establishment of an African Automotive Development Plan, built around a few assembly hubs in the Central, South, East, West, and North of Africa.

“These hubs are then supported by a spread of value-adding activities in neighboring economies.

“This will ensure that there is industrial development in all participating countries, and that associated economic benefits are distributed among these countries.

“Harmonised African Automotive standards are essential for  long-term success of the Auto Pact and we applaud the work  ARSO and Afreximbank are doing to help achieve that,” he said.

Recall that the AAAM recently signed a Memorandum of Understanding (MoU) with Afreximbank,  paving  way for a collaboration aimed at supporting  emergence of a dynamic African automotive industry.

Afreximbank and AAAM would work together to foster  emergence of regional value chains with a focus on value-added manufacturing, created through partnerships between Global Original Equipment Manufacturers, suppliers and local partners. (NAN)