A Memorandum of Understanding (MoU) has been signed between ZENITH Bank Plc and the Secretariat of the African Continental Free Trade Area (AfCFTA) for the creation of the SMARTAfCFTA Portal, which would promote trade within the African continent.
SMARTAfCFTA is a centralised hub for all of the trade-related information that pertains to the African continent. One million dollars’ worth of funding will come from the Bank to support the trade information site in Africa.
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Words on AfCFTA
Speaking at the international trade symposium on non-oil export hosted by Zenith Bank, Secretary General of AfCFTA Wamkele Mene stated that there is a need for Nigeria to take the initiative of expanding into vehicle production in order to satisfy the wide gap of Africa’s population.
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Despite the fact that only South Africa, Morocco, and Egypt produce automobiles, the AfCFTA estimates that there is a void on the continent of five million per year in the market for automobiles. Mene pointed out that Nigeria has the potential to participate in this industry while also benefiting from the $1 billion facility that Afrexim provides to nations that manufacture automobiles.
Mene remarked: “We have identified a number of priority sectors, which we believe in our studies indicate that these priority sectors will enable the diversification that we all want to see. I mentioned the pharmaceutical sector, agriculture and agro-processing, transport and logistics, and the auto sector. In the auto sector again, we had an opportunity to accelerate the diversification of Africa’s economy.”
“Our continent produces 900,000 units of passenger vehicles per year between South Africa, Egypt and Morocco and we are 17 per cent of the global population. India, similarly populated to the African continent, produces five million units of vehicles per year. By the year 2035, our estimates indicate that in order for us to meet domestic demand in Africa we have to produce five million units of vehicles per year.”
“That means that for Nigeria, there is an opportunity to include the auto sector in your strategy if it’s not there already as your strategy for diversification for production of vehicles, creating jobs driving industrialisation, because we know that the demand for the auto sector, Africans auto sector is not going to be met by Egypt, Morocco, South Africa. We have to have more countries that are producing vehicles for the African continent and creating jobs and innovation and driving industrialisation.”
Mene proposed and suggested that the automotive industry be scrutinised more closely because for every unit of investment made on an assembly line to produce a vehicle, four jobs are created in the components manufacturing sector. These jobs can be in the production of lithium batteries, or they can be in the production of any other kind of component. Mene suggested and recommended that the automotive industry be scrutinised more closely.
Therefore, while discussing the value added by diversification, it is appropriate to view the car industry as one of the enablers for the diversification that we would all like to see. This is because the auto sector is one of the most rapidly growing industries in the world.
He concluded: “I am very happy that our development financing institutions have stepped up as Afrexim has provided the facility $1 billion for any country that wishes to start producing vehicles for trade under the AfCFTA.”
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Remarks
In the meantime, the group managing director of Zenith Bank, Ebenezer Onyeagwu, commented on the memorandum of understanding that was signed with AfCFTA. He stated that the implementation of AfCFTA will bring wealth to the African continent, and that the portal that Zenith bank plans to develop would encourage trade throughout Africa.
His words: “We expect that the implementation of this agenda will change the fortune of not just Nigeria for the whole of Africa. The MOU between Zenith Bank and the African continental free trade area will be executed. The MOU will be for Zenith to develop the smart AfCFTA portal which is going to serve as a trade portal that will showcase African products and services where they can be found.”
“With the development of this portal, one of the capabilities we are going to build into is that you can sit in every part of Africa and market your products and services. You can sit in every part of Africa and identify whatever products and services you require that are in Africa.”