Zenith Bank, AfCFTA Sign $1m Agreement For Trade Opportunities

The African Continental Free Trade Area (AfCFTA) has urged Nigeria to develop its auto industry in order to meet its automobile needs as well as that of its neighbours.

This is as Zenith Bank signed  a memorandum of understanding (MoU)  with AfCFTA to create an Intra-Africa trade portal known as the SMARTAfCFTA.

SMARTAfCFTA is a single portal for trade information for the continent on trade. The Bank will fund the portal for trade information in Africa with one million dollars.

Secretary general of AfCFTA, Wamkele Mene, speaking at the Zenith Bank’s international trade seminar, non-oil export yesterday, said there is need for Nigeria to take the initiative of diversifying into automobile production to meet the vast gap of Africa’s population.

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According to AfCFTA’s estimate, there is a five million per annum void in the continent and with only South Africa, Morocco, and Egypt, producing cars. Mene noted that Nigeria can tap into this sector whilst capitalising on Afrexim’s $1 billion facility to countries who take on manufacturing of cars.

Speaking at the seminar, Mene said: “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.”

Recommending that immediate actions be taken towards the automobile sector, he said: “I would suggest and recommend that the auto sector be closely looked at because we know that from every unit of investment on the assembly line to produce a vehicle there are four jobs that are created in the components manufacturing sector, whether it is lithium battery, manufacturing or any other kind of a component. So, as we talk about diversification value addition, let us consider the auto sector is one of the enablers for the diversification that we all want to see.

“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.”

Meanwhile, group managing director Zenith Bank, Ebenezer Onyeagwu speaking on the MOU signed with AfCFTA said the implantation of AfCFTA would bring prosperity to the African continent and the portal to be created by Zenith bank would foster intra-Africa trade.

“ 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,” he pointed out.