Thursday, 14 August 2025

Naacam 2025: Strategies for Revitalizing South Africa's Automotive Industry

Naacam 2025: Strategies for Revitalizing South Africa's Automotive Industry

Against a backdrop of significant industry pressures, key government figures this week committed to tangible interventions aimed at securing the future of South Africa’s automotive components manufacturing sector.

Speaking at the opening of the 2025 National Association of Automotive Component and Allied Manufacturers (Naacam) Show, politicians outlined a multi-faceted approach designed to address immediate threats while positioning the industry for the new energy vehicle (NEV) era.


Nelson Mandela Bay Mayor, Babalwa Lobishe, set a local tone, emphasising the metro's commitment to sustaining existing manufacturers and attracting new investment to the region. Her remarks underscored the critical importance of the sector to the Eastern Cape economy, a point robustly expanded upon by Eastern Cape MEC for Economic Development, Environmental Affairs and Tourism, Nonkqubela Pieters.

MEC Pieters firmly established the province as the cornerstone of South Africa's automotive industry, responsible for exporting over half the country's manufactured vehicles. She pointed to the long-standing presence of major Original Equipment Manufacturers (OEMs) such as Isuzu, Volkswagen and Mercedes-Benz and welcomed the anticipated Stellantis production facility.


However, Pieters did not shy away from the challenges, explicitly citing increased import tariffs, persistent energy supply constraints, and logistical bottlenecks as direct threats to businesses and employment.

"Electricity supply remains the decisive factor in attracting and attaining investment," Pieters says, outlining provincial efforts to diversify the energy mix. These include proposed liquefied natural gas infrastructure development and the accelerated deployment of wind and solar projects.

Furthermore, she detailed plans to enhance freight capacity at the Gqeberha port, finalise a provincial hydrogen strategy, and collaborate with Technical and Vocational Education and Training (TVET) colleges and universities on skills development programmes tailored to the NEV transition.

The national perspective highlighted deeper systemic issues. Minister of Employment and Labour, Nomakhosazana Meth, framed global disruptions as potential opportunities for market diversification into Asia, Latin America and Africa. Yet, she starkly illustrated the sector's fragility by referencing the closure of ArcelorMittal's steel operations in Newcastle and Vereeniging.

"The direct impact is over 3,500 jobs lost in steel production," Meth noted, "with ripple effects across the automotive supply chain potentially pushing total job losses beyond 13 000 in the near term."

While acknowledging a R380-million government lifeline provided through InvestSA and the Industrial Development Corporation, Meth argued for proactive measures. She advocated for a comprehensive steel master plan, built on public-private collaboration, to secure buffer stocks, upgrade mini-mills for OEM-certified steel production, and address underlying competitiveness barriers like energy, logistics, and infrastructure.

To support the NEV shift, Meth confirmed the allocation of R1 billion in state funding aimed at catalysing R30 billion in private investment for local manufacturing projects.


Minister of Trade, Industry and Competition, Parks Tau, presented a sobering analysis of the domestic market. He contrasted 2024’s new vehicle sales of 515 712 units with the South African Automotive Master Plan (SAAM) 2035 target of exceeding 780 000 units. Tau highlighted concerning trends: 64% of vehicles sold domestically are imports, undermining local production, while local content in domestically produced vehicles remains static at 39%, significantly below the 60% SAAM 2035 goal. Compounding this, US tariffs now impact R28,7-billion worth of South African automotive exports.

"These pressures have directly contributed to 12 company closures and over 4 000 job losses within the past two years," Tau says, citing recent production suspensions at Mercedes-Benz and others as symptomatic of industrial value erosion. He stressed that a relatively modest 5% increase in local content could unlock R30 billion in new procurement, far outweighing the potential loss of the R4,4-billion US export market.


Tau detailed specific policy responses. Reforms to the Automotive Production Development Programme Phase 2 (APDP2) are underway, including shifting incentive structures to favour manufacturing over mere assembly.

A critical minerals and metals strategy will prioritise beneficiating platinum group metals, copper, and manganese for high-value NEV components like fuel cells and batteries. Significant tax incentives are also being deployed; the Taxation Laws Amendment Act gazetted in December 2024 introduces a 150% capital allowance for qualifying investments in EV and hydrogen vehicle production assets, applicable between March 2026 and March 2036.

On skills development, Tau confirmed collaborations with Tshwane University of Technology, Cape Peninsula University of Technology, and Unisa to develop new EV manufacturing curricula and certification programmes, culminating in a 100-student pilot project next year. He also reaffirmed commitment to transformation targets, including the SAAM 2035 goal of establishing 130 new black-owned manufacturers.

Addressing the broader investment climate, Tau announced plans for a general laws amendment bill designed to fast-track high-impact investments within 90 days, aiming to reduce red tape. A study via the International Trade Administration Commission (ITAC) will examine the impact of imports on local production.

"Our policy response prioritises offering the carrot, not wielding the stick," Tau concluded, "to attract investment and increase the value-add of our component manufacturers."

The collective message from Gqeberha was clear: the government recognises the severe headwinds facing the auto components sector, from energy instability and logistics failures to global market shifts and job losses.

The pledges made at Naacam 2025 represent a concerted, albeit complex, effort to stabilise the industry through infrastructure investment, policy reform, skills development, and targeted financial support, aiming to navigate the transition towards a more resilient and technologically advanced future. The success of these undertakings will be measured in the coming years by their ability to translate commitment into concrete results on factory floors and in export figures.

https://bit.ly/41sLWov

UD Trucks: Driving Positive Change in South Africa

UD Trucks: Driving Positive Change in South Africa

For more than six decades, UD Trucks Southern Africa (UDTSA) has established itself as a fixture within the region, known both for its Japanese-engineered sustainable transport solutions and its active role in community development. The company underscores its 'Better Life' purpose through a range of initiatives focused on skills building, job creation, women's advancement, and safety.

Managing Director Filip Van den Heede emphasised the company's local roots: "South Africa is home for our brand. Our commitment extends well beyond manufacturing trucks; we are dedicated to making a positive contribution to the societies we serve. Our flagship CSR projects reflect this, aiming to create lasting impact in the transport industry and people's lives for a better future."


Shared Purpose Drives Industry Collaboration

A key example is UDTSA's ongoing partnership with SaferStops, united by a vision to improve safety, wellness, and working conditions for truck drivers nationwide. In 2025, UDTSA was a major sponsor of the SaferStops Truck Driver Safety and Wellness Symposium. The event drew 384 delegates, including 191 truck drivers, and 28 sponsors. It prioritised driver wellbeing through health check-ups, vision tests, and workshops covering physical, financial, and emotional wellness on the road.

SaferStops also launched the "Leaders in Motion" series at Stellenbosch University, collaborating with the Department of Logistics. This initiative connected young people with the logistics and transport industry. Van den Heede participated, sharing insights on operational and strategic challenges as a Japanese manufacturer in South Africa and offering students hands-on product experience.

Honouring Mandela Through Community Action

Reinforcing its commitment during Mandela Month, UDTSA supported local communities. The team visited Sinqobile Primary School in Soshanguve, donating school shoes, socks, and fresh fruit to enhance student wellbeing and confidence. UDTSA also assisted SOS Children’s Village Mamelodi, providing vulnerable children with essential items like comforters, fitted sheets, oil heaters for winter warmth, and pine desks and chairs, reflecting the spirit of Ubuntu.


Prioritising Road Safety Nationwide

UDTSA partnered with Fleetwatch as a leading sponsor at the 54th Brake & Tyre Watch event in Potchefstroom. This industry-led initiative educates traffic officials on roadside safety inspections. The 2025 event saw a 97% attendance rate among traffic officials, the highest in three years. Eighty-two officials received training, leading to the inspection of four vehicles (one discontinued, three with tyre faults). UDTSA showcased the advanced safety features of its trucks, highlighting the value of collaboration for safer roads.

Investing in Skills for the Future

Skills development and job creation are central to UDTSA's strategy. The company actively participates in the Youth Employment Service (YES) programme, providing hands-on experience, mentorship, and training to over 40 young South Africans in sales and manufacturing this year. This supports national efforts to address youth unemployment.

Further, as an extension of its Ultimate Women Program with the Commercial Transport Academy (CTA), UDTSA is training ten young women from the YES cohort to become professional truck drivers, empowering them with skills and confidence.


Sustaining the Commitment

Janet Frost, HR Director at UD Trucks Southern Africa, outlined the path forward: "As a significant regional brand, we integrate our Better Life purpose and community needs into our core business. We remain committed to investing in and empowering individuals who will shape the future of our industry and South Africa." Through its CSR initiatives and partnerships, UDTSA pledges to continue sharing its success with the communities supporting it.

https://bit.ly/4loO0VD

Friday, 8 August 2025

Women Leading Change in South Africa's Trucking Industry

Women Leading Change in South Africa's Trucking Industry

A noticeable shift is taking hold within South Africa's transport sector. This change is being driven by women who are not only mastering the long stretches of national road but also actively redefining perceptions of the truck driving profession.

Zureena Samuels, a driver-operator for Frost Logistics, embodies this evolution. Her path into trucking was paved by a family connection to the road, a strong desire for independence, and an appetite for new experiences. "I found my calling behind the wheel of a Code 14 truck," Samuels states simply.

Operating a Volvo FH truck, Samuels specialises in the careful transport of temperature-sensitive goods. Her daily work involves ensuring the integrity of fresh produce, frozen foods, pharmaceuticals, and other perishables requiring strictly controlled environments throughout their journey.

"As truck drivers, we play a vital role in the economy, and I am proud to be doing my part," Samuels explains. "More specifically, as a female truck driver, I feel motivated to succeed at the logistical challenges we encounter daily. As a bonus, I get to experience some truly beautiful destinations across South Africa and meet inspiring people. It brings its own rewards."

Zureena Samuels

Samuels is a vocal advocate for greater inclusivity within transport companies and among industry decision-makers. "It starts with giving women their rightful place," she asserts. "Promote female role models, offer dedicated training and mentorship, and involve women in decision-making processes. We can add significant value if given the opportunity. Ultimately, this benefits everyone and leads to shared success."

Recalling her first day manoeuvring a large truck, Samuels describes it as both nerve-wracking and thrilling. Her inherent determination and adventurous spirit quickly saw her mastering the vehicle's capabilities, marking the beginning of a career built on courage, resilience, and unwavering commitment.

Women truck drivers routinely navigate distinct hurdles, including limited access to suitable facilities, ongoing safety concerns, and persistent gender-based stereotypes. Yet drivers like Samuels demonstrate what is achievable, whether reversing 15-metre trailers with precision, ensuring temperature-sensitive cargo arrives on time and intact, or safely traversing difficult routes in adverse weather conditions.

What fuels her drive? A deep passion for the job and the satisfaction of mastering a skill demanding both mental acuity and physical strength. Equally important is the knowledge that her presence on the road helps clear a path for others following behind.

Samuels emphasises that efficiency in truck driving hinges on meticulous attention to detail, effective time management, and an unwavering focus on road safety. "Long hours alone demand self-motivation and emotional resilience," she notes. "You need to stay calm under pressure and make decisions swiftly. Features like adaptive cruise control and advanced braking systems aren't just conveniences; they are essential for enhancing safety and performance. I firmly believe every truck should be equipped with technology like automatic emergency braking and lane-keeping assist."

As South Africa observes Women's Month in August, Samuels sees it as a period for reflection. "It acknowledges progress while highlighting the challenges and barriers still facing women seeking equal opportunities and fair recognition," she says. "Women’s Month is a call to action to create space for women in sectors that have historically excluded them. It’s time to acknowledge that change isn't just possible; it’s actively unfolding."

"I am living proof," Samuels continues. "Women can contribute meaningfully to both the economy and the industry, driving positive change in the communities we serve. Skills and competence should never be used as barriers. At heart, we all want to earn an honest living to support ourselves and our families. Given the chance, women can rise to any challenge and help transform transport."

Samuels credits a strong support network, particularly her family, for her success. "My father and brothers taught me the ropes and constantly reinforced that 'you can do this.' Their belief became the bedrock of my confidence and career," she shares.

Acknowledging the demands of life on the road – long hours, scarce rest stops, delivery pressures – Samuels prioritises self-care: staying hydrated, eating properly, exercising, and ensuring adequate rest. "In this job, health isn't a luxury; it's a necessity," she stresses. "You need constant alertness. Being healthy provides the energy and sustained focus required to deliver safely and punctually."

Her truck cab serves as a home away from home, even carrying a name inspired by strength and wisdom: Sarabi, after Simba's mother in The Lion King. "Her character embodies mine; soft, but bold," Samuels explains.

Beyond driving, Samuels champions industry improvements. "In South Africa, safety transcends gender," she points out. "Safer, cleaner rest stops with secure parking are essential for all drivers, especially long-haul operators needing reliable overnight rest. Facilities thoughtfully designed for women would be a major step forward, encouraging more to enter the industry with confidence."

For young women contemplating trucking, Samuels offers clear advice: be strong, be smart, be prepared to work hard, and stay true to yourself. "Prioritise safety always, plan meticulously, and never give up," she urges. "Surround yourself with mentors and like-minded pioneers; they offer guidance and support. And crucially, remember to find enjoyment in the journey."

"Empowering women isn't about diminishing the contributions of the many men dedicated to transport," Samuels concludes. "It’s simply about making space for women like me to participate fully too."

https://bit.ly/3UPmGon

Tuesday, 5 August 2025

Arise IIP Joins IATF2025 as Premier Partner

Arise IIP Joins IATF2025 as Premier Partner

Arise Integrated Industrial Platforms (Arise IIP), the pan-African developer and operator of large-scale industrial ecosystems, has been confirmed as an official Premier Partner for the upcoming Intra-African Trade Fair 2025 (IATF2025). The significant trade and investment event is scheduled for Algiers, Algeria, from 4 to 10 September 2025.

Organised by the African Export-Import Bank (Afreximbank) in co-operation with the African Union Commission and the African Continental Free Trade Area (AfCFTA) Secretariat, and hosted by Algeria, IATF2025 anticipates hosting more than 2,000 exhibitors from Africa and other regions. 

The biennial fair aims to stimulate trade within Africa and highlight diverse investment prospects across the continent, with expectations of facilitating trade and investment deals valued at over US$44 billion. This edition will feature a notable contingent of production and service companies, complemented by a dedicated forum focused on investment, trade, and advancing Africa’s economic integration.


Arise IIP, established as a joint venture involving the Africa Finance Corporation (AFC), Equitane, and the Fund for Export Development in Africa (FEDA) – a subsidiary of Afreximbank – focuses on identifying industrial needs within African nations. 

The company designs bespoke solutions to foster sustainable local processing of raw materials, increase export capacity, and enhance trade flows. Its core mission centres on accelerating Africa’s industrial development through the creation of tailored industrial parks and processing zones that leverage local opportunities.

Mrs. Kanayo Awani, Afreximbank’s Executive Vice President for Intra-African Trade and Export Development, welcomed the partnership. She highlighted the established strategic collaboration between Afreximbank and Arise IIP over recent years, driven by shared objectives of promoting intra-African trade, enabling industrial expansion, and reinforcing Africa’s role within global value chains.

Echoing this sentiment, Mr. Amit Agrawal, Chief Operating Officer of Arise IIP, expressed honour at partnering again with the Intra-African Trade Fair. He described IATF as a key platform for connecting stakeholders dedicated to Africa’s industrialisation and economic integration. Agrawal noted that participation in IATF2023 enabled Arise IIP to demonstrate the potential of local manufacturing during its Country Day event, and the company looks forward to building on this progress. 

He emphasised Arise IIP's conviction that intra-African trade is fundamental to realising the continent’s industrial capabilities, stating that IATF2025 presents a significant opportunity to form new partnerships, attract investment, and speed up the development of sustainable and inclusive industrial ecosystems.

Arise IIP’s operational footprint extends across multiple African nations, including key projects such as the Gabon Special Economic Zone (GSEZ), the Glo-Djigbé Industrial Zone (GDIZ) in Benin, the Plateforme Industrielle d’Adétikopé (PIA) in Togo, the Bugesera Special Economic Zone (BSEZ) in Rwanda, and the Industrial Platform Remo Free Zone (IPRFZ) in Nigeria.

https://bit.ly/3JgT5BI

Thursday, 31 July 2025

Africa Automotive: Exploring Green Steel in South Africa - A Path to Sustainability

Africa Automotive: Exploring Green Steel in South Africa - A Path to Sustainability

As global industries shift towards greener practices, South Africa is beginning to explore the potential of ‘green steel’—a low-carbon alternative to traditional steelmaking—with interest from both steel producers and automotive manufacturers. 

Image Supplied: ArcelorMittal

Green steel is produced using renewable energy and hydrogen instead of coal, significantly reducing carbon emissions. Given that steel production is a major contributor to global CO₂ emissions, the push for greener alternatives has gained momentum worldwide. In South Africa, where the steel and automotive sectors are key economic drivers, the transition could play a crucial role in maintaining competitiveness, especially as international markets impose stricter environmental regulations. 

Currently, no South African automakers are using green steel in large-scale production, but industry leaders are closely monitoring developments. Companies like Mercedes-Benz South Africa and BMW Group South Africa have committed to sustainability goals, including carbon-neutral manufacturing, which could eventually incorporate green steel. 

Image supplied: ArcelorMittal

On the production side, ArcelorMittal South Africa, the country’s largest steelmaker, has signalled interest in decarbonisation. The company has partnered with renewable energy providers and is exploring hydrogen-based steelmaking, though full-scale green steel production is not yet a reality. Similarly, South Africa’s Industrial Development Corporation (IDC) has highlighted green steel as a priority for future investment, aligning with global trends towards sustainable industrial processes. 

Experts suggest South Africa, with its abundant solar and wind resources, is well-positioned to produce green hydrogen, a key component in green steel manufacturing. However, high costs and infrastructure challenges remain barriers to rapid adoption. 

The transition to green steel is inevitable, but it will require significant investment and policy support but for South Africa to remain a player in global automotive and steel markets, it must accelerate its shift towards sustainable production methods.

While the local industry is still in the early stages, the global push for decarbonisation means green steel could soon become a critical factor in South Africa’s industrial future. For now, automakers and steel producers are watching closely, preparing for a greener transition. 

https://bit.ly/4odFyej

Monday, 28 July 2025

Testing Hino's 300 Series Hybrid Trucks: Fuel Efficiency and Emissions Reduction

Testing Hino's 300 Series Hybrid Trucks: Fuel Efficiency and Emissions Reduction

Hino South Africa is broadening real-world testing of its innovative 300 Series Hybrid trucks, placing more vehicles with selected customers to rigorously assess performance and gauge local interest in new energy commercial vehicles. This expansion marks a significant step in understanding how hybrid technology fits into the South African transport landscape.

The hybrid system pairs a robust 4-litre Euro 6 turbo-diesel engine with an electric motor. This combination aims to significantly lower harmful emissions and deliver improved fuel economy compared to conventional diesel trucks. Unlike some hybrid passenger cars that reduce engine size, Hino retains the full-size diesel engine in the 300 Hybrid, prioritising long-term durability and reliability under demanding working conditions.


The electric motor is positioned between the clutch and gearbox, operating in parallel with the diesel engine. This setup provides power assistance, enhancing overall efficiency and reducing carbon dioxide output. Together, the diesel engine and electric motor generate 111 kW of power and 470 N.m of torque, with peak torque available from as low as 1 200 r/min. Power is delivered through a six-speed automated manual transmission (AMT), which drivers can manually override if needed.

These local trials build upon experience gained since 2023, when the first three Hino 300 Hybrids arrived in South Africa. These initial units have been successfully operating with Namlog Logistics from the Toyota Africa Parts Centre in Ekurhuleni, forming a key part of Toyota South Africa Motors' broader New Energy Vehicle (NEV) strategy.


This initiative reflects the long-standing commitment of Hino Motors in Japan to reduce emissions and fuel consumption, encompassing both manufacturing processes and vehicle operation. As part of its multi-pathway strategy towards carbon neutrality, Hino globally develops and tests diverse powertrain solutions, including compressed natural gas, hydrogen fuel cells, battery electric vehicles, and diesel-electric hybrids like the 300 Series.

"Itumeleng Segage, General Manager of Hino South Africa, emphasised the practical considerations driving the trials: “Finding the right balance between cost, operational range, payload capacity, maintenance requirements, and future resale value is essential. These factors determine which technology suits specific applications best. That’s precisely why we are running these local customer trials with several Hino 300 Hybrid trucks – to evaluate these critical measures under South African conditions."

Early indications from overseas markets are encouraging. In Australia, where Euro VI emission standards take effect later this year, the Hino 300 Hybrid is gaining traction. A recent 300 km test replicating urban delivery conditions around the Bathurst race circuit demonstrated notable fuel savings – approximately 24% for Wide Cab variants and 22% for Standard Cab models. Australian motor industry publication GoAuto reported similar results, achieving a 21.1% fuel saving in their independent test run.

The Hino 300 Hybrid retains the standard features expected in the 300 Series, including air conditioning, AM/FM radio, electric windows, dual airbags and daytime running lights, ensuring operator comfort and safety are not compromised.

Segage concluded, “We see considerable value in hybrid technology for many operations suited to the 300 Series, particularly urban delivery and city-to-city transport. We are keenly looking forward to the outcomes of these extended local trials and the direct feedback from the customers operating these trucks.” The results will be crucial in shaping Hino's strategy for introducing new energy vehicles to the South African market.

https://bit.ly/3GL5ddH

Monday, 21 July 2025

Africa's Mineral Leverage Amid US Trade Policies

Africa's Mineral Leverage Amid US Trade Policies

Africa possesses substantial reserves of minerals critical to global industries, including the United States economy. During the Trump administration, Section 232 tariffs were imposed on steel and aluminium imports globally, impacting several African exporters such as South Africa. This raises the question: could African nations leverage their mineral exports to counter such US trade policies? A balanced analysis reveals significant complexity.

The Case for Potential Leverage:

- Criticality and Concentration: Minerals such as cobalt, platinum group metals (PGMs), and manganese are not only essential for advanced manufacturing (aerospace, defence, EVs, electronics) but also highly concentrated in specific African countries. The DRC dominates cobalt; South Africa dominates PGMs and chromite. This creates potential supply chokepoints.
- Limited Short-Term Substitutes: For many applications (eg, cobalt in specific battery chemistries, PGMs in catalysts), viable substitutes are either non-existent, significantly less efficient, or much more expensive in the near-to-medium term. Developing new sources takes years.
- Disruption Impact: Any significant disruption or deliberate restriction of these mineral flows could cause substantial price volatility and supply chain bottlenecks for US industries, potentially impacting economic growth and strategic sectors.

Significant Constraints on Leverage:

- Dispersed Interests: Africa is not a single actor. Mineral wealth is spread across numerous countries with differing political agendas, economic priorities, and relationships with the US. Achieving coordinated action across the continent on trade policy, especially targeting the US, is highly improbable. The African Continental Free Trade Area (AfCFTA) is nascent and focuses on intra-African trade.
- Mutual Dependence: Many African economies are heavily reliant on mineral export revenues. Restricting exports to the US (a major market) could inflict severe economic damage on the exporting countries themselves, potentially destabilising economies and governments. This creates a significant disincentive.
- US Mitigation Strategies: The US is acutely aware of these supply risks. Responses could include:
- Increased Domestic Production/Recycling: Incentivising mining within the US or allied nations (though challenging and slow).
- Stockpiling: Using the National Defense Stockpile.
- Allied Sourcing: Strengthening supply chains with friendly nations (e.g., Australia for some minerals).
- Technological Innovation: Accelerating research into alternative materials or battery chemistries (e.g., cobalt-free batteries).
- Financial/Political Pressure: Utilising tools like sanctions or leveraging international financial institutions.
- AGOA Factor: The African Growth and Opportunity Act (AGOA) grants many Sub-Saharan African countries preferential tariff access to the US market for non-mineral exports (textiles, agriculture, etc.). Threatening mineral exports could jeopardise these valuable benefits.
- Specificity of Tariffs: The Trump-era tariffs targeted specific products (steel, aluminium), not the raw minerals themselves. While tariffs hurt African aluminium exporters (like South Africa) processing bauxite, the primary bauxite producers (eg, Guinea) were less directly impacted. Leveraging unrelated minerals (like cobalt) against aluminium tariffs would be an indirect and legally/politically complex strategy.

A Balanced Perspective:

While Africa holds globally significant reserves of minerals critical to the US economy, the notion of the continent wielding this as a unified, effective bargaining chip against specific US tariffs like those imposed under Trump faces substantial hurdles.

The concentration of certain minerals provides theoretical leverage points. However, the fragmentation of African nations, their own deep economic dependence on mineral exports, the existence of mechanisms like AGOA, and the US's capacity to pursue mitigation strategies significantly weaken the practical ability to translate this mineral wealth into tangible trade concessions on unrelated tariffs.

Attempting aggressive leverage could easily backfire, harming African economies more than the US in the short-to-medium term, while accelerating US efforts to reduce dependence on African minerals in the long term – an outcome contrary to Africa's interests in sustained mineral revenue.

A More Pragmatic Path:

Rather than confrontation, the more viable strategy for African mineral-rich nations lies in:

- Value Addition: Processing minerals domestically before export (e.g., refining cobalt, manufacturing battery precursors) to capture more economic benefit and create jobs.
- Stable Investment Frameworks: Attracting responsible investment for exploration and mining through predictable, transparent regulations and reduced political risk.
- Strategic Partnerships: Negotiating mutually beneficial, long-term supply agreements with consumer nations and companies, potentially linked to infrastructure development or technology transfer, rather than reacting to specific tariffs.
- Intra-African Coordination (where possible): Collaborating on policies like environmental standards or local beneficiation goals to strengthen their collective position within global value chains.

Conclusion:

Africa's mineral wealth grants it inherent economic significance, particularly concerning specific critical minerals. However, translating this into leverage against US trade policies like the Trump tariffs is fraught with practical difficulties and significant risks for African economies. The path to maximising Africa's benefit from its resources more likely lies in internal development, value addition, and fostering stable, mutually beneficial partnerships, rather than in attempting short-term, high-stakes leverage that could undermine long-term economic stability and growth. The relationship remains one of complex interdependence, not one where Africa holds a simple, decisive upper hand.

https://bit.ly/46YDznQ

Tuesday, 8 July 2025

Unlocking Trade: Introducing the PAPSS African Currency Marketplace

Unlocking Trade: Introducing the PAPSS African Currency Marketplace

The Pan-African Payment and Settlement System (PAPSS), working alongside African deep-tech firm Interstellar, unveiled the PAPSS African Currency Marketplace (PACM) during the recent Afreximbank Annual Meeting (AAM2025). This new Financial Market Infrastructure aims to tackle the persistent challenge of currency convertibility hindering trade within Africa.

For years, intra-African commerce has been hampered by the continent's 41 diverse currencies, varying regulations, and limited convertibility. Businesses frequently resorted to using external hard currencies like the US dollar for transactions between neighbouring nations. This practice, known as the "hard and costly currency bottleneck," is estimated to drain approximately R90 billion annually through fees, delays, and lost opportunities, impacting the competitiveness of African enterprises and slowing progress under the African Continental Free Trade Area (AfCFTA).


PAPSS CEO Mike Ogbalu III explained the new marketplace's function: "The PAPSS African Currency Marketplace is fully transparent, order book-driven, and operates with trusted counterparties, strictly adhering to local regulatory frameworks and global best practices. By creating a single, continent-wide liquidity pool, PACM serves as a key liquidity engine for intra-African commerce." 

Ogbalu noted that while PAPSS, operational since 2022, has enabled real-time payments across 17 countries, connecting over 150 banks and 14 national switches, the issue of limited currency convertibility remained. "We soon realised that solving for payments alone was not enough," he stated, highlighting problems like over R36 billion in airline revenues currently 'trapped' in certain African countries due to exchange restrictions.

The PACM, developed jointly by PAPSS and Interstellar, allows the direct exchange of African currencies without converting through hard currencies. Functioning as a transparent, peer-to-peer platform across Africa, it enables businesses to trade in local currencies in near real-time while complying with national rules. This approach aims to unlock liquidity, release trapped capital, reduce foreign exchange costs, and support financial sovereignty.

Interstellar's Founder and CEO, Ernest Mbenkum, emphasised the vision during the launch: "PACM was built from the ground up to serve Africa’s specific needs. PAPSS and Interstellar are co-architects of a new financial future... African currencies deserve a better place in the world. With this marketplace, your local currency is no longer just a medium of exchange, it becomes a vehicle of opportunity." The platform utilises Interstellar's enterprise-grade, blockchain-agnostic infrastructure for security, scalability, and rapid settlement.

Haytham El Maayergi, Executive Vice President of Afreximbank, commented: “The PAPSS African Currency Marketplace gives us the power to transform trade dramatically, bringing us to trade with each other with a key benefit that we can now accept each other’s currency.”

Initial results from a pilot phase are promising. Over 80 African corporates conducted transactions across 12 currency pairs, settling entirely in local currencies. Kenya Airways, for instance, can now directly exchange Nigerian Naira earned from ticket sales for Kenyan Shillings via PACM, bypassing a third currency. Early adopters like ZEP-RE (PTA Reinsurance Company) and Access View Africa have expressed strong support. Ogbalu added that interest is also coming from institutions outside Africa seeking to join the ecosystem.

AfCFTA Adjustment Fund Makes First Investment

In related news at AAM2025, the Credit Fund of the AfCFTA Adjustment Fund announced its first investment closure. It committed R180 million to Telecel Global Services Ltd., a subsidiary of the Mauritius-based Telecel Group, through a senior secured amortising loan.

Telecel provides wholesale voice, SMS services, and enterprise connectivity to over 250 telecom operators globally, with a significant African presence. The investment will support Telecel's expansion in Ghana and Liberia, strengthen infrastructure, and help bridge Africa’s digital divide – a critical factor for AfCFTA success.

Jean-Louis Ekra, Chairman of the Board of the AfCFTA Adjustment Fund Corporation, stated: “This R180 million investment in Telecel Global Services demonstrates how targeted capital can drive meaningful impact—accelerating digital connectivity, enabling intra-African trade, and supporting private sector-led development.” AfCFTA Secretary-General Wamkele Mene noted the deal shows the Fund starting to support State Parties and the private sector in making the Agreement "commercially meaningful."

Afreximbank President Prof. Benedict Oramah said the investment strengthens the digital economy and regional connectivity, reinforcing a commitment to transforming Africa's economic structure. Marlene Ngoyi, CEO of Fund Manager FEDA, highlighted the strategic intent to catalyse growth in vital sectors.

The Credit Fund will prioritise commercially viable investments enabling trade, diversification, and inclusive growth aligned with AfCFTA goals. Meanwhile, the PAPSS African Currency Marketplace is now open to eligible corporations, financial institutions, and market participants continent-wide.

https://bit.ly/3IasupI

Friday, 4 July 2025

Africa Automotive: South Africa's Automotive Industry Faces Production Challenges Amid Global Pressures

Africa Automotive: South Africa's Automotive Industry Faces Production Challenges Amid Global Pressures

The suspension of C-Class sedan production at Mercedes-Benz South Africa's (MBSA) East London plant until late July underscores a deepening crisis within South Africa's vehicle assembly sector, according to Renai Moothilal, chief executive of the National Association of Automotive Component and Allied Manufacturers (Naacam). Moothilal describes production plant volume cuts as increasingly frequent over the past two years.

MBSA confirmed the planned non-production period from 24 June to 30 July, attributing it to sufficient existing stock meeting current demand and standard procedure for volume adjustments. Operations are set to resume on a two-shift basis from 1 August. Naacam indicates component suppliers received advance notice of this specific shutdown.


"This planned closure aligns with patterns observed across the South African vehicle assembly landscape for approximately two years," Moothilal stated. "While uncertainty stemming from US tariff situations presents obvious market issues, the persistent volume reductions pose a significant threat to the business sustainability of component manufacturers."

Naacam has documented numerous local component plant closures and associated job losses directly linked to assemblers failing to achieve the production volumes initially projected when vehicle platforms were launched. "This correlation is clear and has occurred at several assemblers locally since 2023," Moothilal emphasised.

He points to the anticipated 2025 policy review of the government's Automotive Production and Development Programme (APDP), led by the Department of Trade, Industry and Competition, as a critical juncture. Moothilal argues the review must urgently devise mechanisms to shield component companies from the damaging impact of volatile assembly volumes. Currently, vehicle manufacturers receive the largest portion of APDP incentives, including cash and duty rebates tied to assembly volumes and domestic value addition.


"The goals of the South Africa Automotive Masterplan 2035 (SAAM 35) concerning localisation and employment hinge on addressing this imbalance," Moothilal warned. "Failure to do so jeopardises these objectives." When SAAM 35 was drafted between 2016 and 2018, average local content in domestically assembled vehicles stood below 40%, ranging from roughly 30% for high-tech passenger cars to 45% for light commercial vehicles. Moothilal notes that nearly a decade later, this figure remains largely unchanged, despite SAAM 35 targeting 60% local content by 2035. The plan also aims to double employment within the automotive value chain, from about 112 000 to 224 000 people.

Export Reliance and Global Headwinds

MBSA's situation highlights the sector's export dependency. Over 90% of its East London output is shipped to more than 80 global markets, vital as domestic sales for premium brands like Mercedes-Benz have declined sharply. Factors include increased competition from Chinese imports and a consumer shift towards more affordable vehicles.

The parent company, Mercedes-Benz Group, faces its own challenges: a sluggish German economy, potential US tariffs, and surging Chinese competition. The company warned in April of "material impacts" on its financial results if all implemented and announced tariffs remain through 2025.

The European Union, South Africa's largest vehicle export market, presents a mixed picture. While overall EU new car registrations dipped slightly (0.6%) year-to-date until May 2025, battery-electric vehicle (BEV) market share grew to 15.4%. Chinese automakers doubled their EU market share to 5.9% in May 2025 compared to May 2024, demonstrating resilience even amidst new EU tariffs on Chinese EVs by focusing on plug-in and full hybrids. Mercedes-Benz ranked tenth among the top 25 BEV brands in the EU for May, behind Volkswagen (first) and BMW (third), both of which also manufacture in South Africa.


Contrasting African Markets and Local EV Lag

While South Africa contends with production volatility, other African markets show strong growth. Morocco's new car market surged 36.14% in the first half of 2025, selling 112 026 units. Egypt recorded a dramatic 128% year-on-year increase in total automotive sales for May 2025, reaching 14 300 units, with passenger car sales up 98%.

South Africa's automotive sector, contributing 5.2% to GDP (3.2% manufacturing, 2% retail), demonstrated resilience in June 2025 with new vehicle sales climbing 18.7% year-on-year, buoyed by interest rate cuts, controlled inflation, and affordable Chinese imports. However, exports showed signs of strain for major players.

A significant lag remains in electric vehicle adoption. While global EV sales exceeded 17 million units in 2024, growing over 25%, South Africa is a slow starter. Naamsa, the National Association of Automobile Manufacturers of South Africa, is spearheading efforts to build foundational infrastructure. It has commenced work on a national network of 120 publicly accessible EV charging stations along major routes, featuring fast chargers.

Shivani Singh, Naamsa's chief projects officer, highlighted fuel station forecourts as ideal locations due to their traffic, location, and permits. The current scarcity is stark: fewer than 400 public EV chargers compared to 4 800 licensed petrol stations. Timothy Oliver, fuel specialist at Connect Group South Africa, cited capital constraints for diversification and complexities of managing multiple sites as hurdles for retailers.

Naamsa's charging network initiative represents a concrete step towards making EV ownership viable, aiming to replace the unreliable and sparse infrastructure currently available. The success of this infrastructure push, coupled with addressing the fundamental challenges of assembly volume stability and localisation incentives highlighted by Naacam, will be crucial for the future sustainability and growth of South Africa's critical automotive industry.

https://bit.ly/44d0udy

Friday, 13 June 2025

Continental Auto Industry Gathers Momentum Amidst Trade Push, SA Exports Hold Steady

Continental Auto Industry Gathers Momentum Amidst Trade Push, SA Exports Hold Steady
Johannesburg, a historical nexus of commerce and ambition, recently hosted pivotal discussions framing Africa’s automotive future. The gathering served as a precursor to the Africa Automotive Show, integrated within the larger Intra-African Trade Fair (IATF2025), scheduled for Algiers, Algeria, between 4 and 10 September 2025. 

This event is positioned as a critical driver for continental economic integration under the African Continental Free Trade Area (AfCFTA), even as specific challenges, including the noted closure of South Africa's Goodyear tyre factory, underscore persistent hurdles. 

Representatives from the African Export-Import Bank (Afreximbank) and the South African government emphasised the urgent need to translate policy into tangible trade. Afreximbank executives highlighted a fundamental barrier: not tariffs or logistics, but a deficit in actionable market intelligence. 

Illustrative cases were stark: Tunisia, Morocco, and South Africa collectively import over $400 million in leather goods annually from outside Africa, despite significant production capacity in Ethiopia, Kenya, and Sudan. Similarly, West African nations spend upwards of $3 billion importing meat from distant markets like Argentina and Australia, overlooking potential suppliers including Mali, Namibia, Chad, Sudan, Botswana, South Africa, and Zambia. 

"This isn't about capacity," Humphrey Nwogo, Regional Director, Southern Africa for Afreximbankl stressed. "The problem is connectivity. The problem is lack of information." 

These imbalances represent missed chances for job creation, value addition, and economic diversification continent-wide. Assembly operations at the Toyota plant in Prospecton, Durban 

The IATF, now formally designated by the African Union (AU) as the AfCFTA's commercial face and integrated into its framework, is seen as the strategic tool to bridge this gap. Its relevance was affirmed at the 2024 AU Summit, where heads of state acknowledged its role in facilitating cross-border agreements. 

South African Context: 

Exports and ImperativesAgainst this backdrop, South Africa's role in the continental vehicle manufacturing landscape remains significant. According to the latest figures from naamsa | The Automotive Business Council, the country produced approximately 515 000 vehicles during 2024. Combined with substantial output from North African nations, primarily Morocco and Egypt, total continental production reached an estimated 1,2-million units. 

This starkly contrasts with minimal output from West, Central, and East Africa, highlighting significant growth potential. 

"These figures demonstrate the existing industrial base concentrated in the north and south," says Nwogo. "The potential for replication and expansion into other African regions is immense. 

Achieving a continental output target of 5-million units is a feasible ambition underpinned by the AfCFTA." 

However, South African officials acknowledged hurdles hindering deeper integration. Deputy Minister of Public Works and Infrastructure, Sihle Zikalala, pointed to logistics constraints and skills gaps impacting cost-competitiveness for South African exports elsewhere in Africa. 

He cited the example of a Tunisian colleague driving a vehicle manufactured in Thailand rather than South Africa. "That’s why we are in this room," Zikalala remarked, underscoring the need for the AfCFTA to address these frictions. 

Beyond Assembly: The Skills Imperative

The discussion extended beyond mere vehicle assembly to encompass the entire value chain and skills ecosystem. Industry experts emphasised that sustainable growth requires equipping markets with the technical and soft skills needed to service and maintain vehicles post-sale. 

The African Association of Automotive Manufacturers (AAAM) highlighted its Skills Development Working Group, focusing on building capacity from artisan levels to policy-making echelons. Initiatives include executive short courses for trade officials and practical exposure within manufacturing plants, aiming to foster informed policy development and local job creation alongside industrialisation.  

Kenya Positions for AfCFTA Gains
Echoing the continent-wide focus, Kenya used its own IATF2025 roadshow to position itself as a trade, industrial, and innovation hub. Cabinet Secretary for Investments, Trade and Industry, Hon. Lee Kinyanjui, stated, "The solutions to Africa’s problems lie with Africans. It is essential for countries within the continent to strengthen intra-African trade... 

With a well-educated population, abundant resources, and banks ready to finance investment, Africa has what it takes to elevate itself to the next level." Afreximbank's Executive Vice President, Haytham Elmaayergi, reiterated the information gap challenge at the Kenyan event, using the leather import example, and spotlighted Kenya’s digital innovation sector as having significant export potential under the AfCFTA. 

As nations prepare for Algiers 2025, the focus remains on harnessing regional value chains, accelerating industrialisation, and overcoming informational and infrastructural barriers. The Africa Automotive Show within the IATF stands as a pivotal marketplace and catalyst for converting the AfCFTA's promise into tangible commercial progress across the continent, with South Africa's established export capacity poised to play a key role amidst ongoing domestic challenges. https://bit.ly/4l644vI