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    Home » AU Clears Path for ‘Made-in-Africa’ Cars
    ECONOMY

    AU Clears Path for ‘Made-in-Africa’ Cars

    February 19, 20263 Mins Read
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    Major step forward as African Union signs off on ‘Made-in-Africa’ auto trade rules – AAAM
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    African heads of state have formally approved new Rules of Origin for automotive products under the African Continental Free Trade Area, marking a significant development for a sector long constrained by fragmented trade regimes. The decision was endorsed at the 39th ordinary session of the African Union Assembly, following agreement by the AfCFTA Council of Ministers in Cairo in September last year on customs codes 8701 to 8716, covering vehicles and components.

    The adoption of harmonised automotive Rules of Origin establishes the criteria under which products may qualify for preferential trade treatment within the AfCFTA framework. Under the new regime, vehicles and components must contain at least 40% African originating content to be recognised as “Made in Africa”, while up to 60% may comprise non-originating inputs. The 60% ceiling has been adopted as an interim measure, subject to review after five years, with the stated objective of encouraging localisation while allowing industry to scale.

    Industry leaders argue that the absence of common standards has historically limited intra-African automotive trade. Africa accounts for less than 1% of global vehicle production, with annual output concentrated in a handful of countries, including South Africa and Morocco. Total vehicle sales across the continent remain below 1.2 million units per year, a fraction of volumes recorded in single large markets such as China or the United States. Fragmented tariff structures and small domestic markets have constrained investment in component manufacturing and cross-border supply chains.

    The African Association of Automotive Manufacturers has described the new framework as a milestone in efforts to create a unified continental market. The organisation says the decision provides legal certainty for manufacturers considering investments in assembly plants and supplier networks across multiple jurisdictions. The AfCFTA automotive strategy identifies the sector as a priority for industrialisation, employment creation and value-chain integration, particularly as countries seek to diversify away from raw material exports.

    Under the AfCFTA tariff schedule, countries that have placed automotive products in Category A will liberalise duties immediately, while Category B allows phased reductions. The approval of the Rules of Origin enables qualifying products to benefit from duty-preferential trade once tariff commitments are implemented, creating incentives for regional sourcing of components.

    The AfCFTA Secretariat has indicated that the framework is designed to stimulate localisation and industrial capacity over time. The five-year review mechanism is intended to assess whether the 60% non-originating allowance should be tightened as regional supplier ecosystems develop.

    AAAM members, which include vehicle manufacturers and allied industry players operating across the continent, argue that clearer trade rules will support the development of regional value chains. The body maintains that a predictable regulatory environment is critical for attracting long-term capital investment in assembly facilities, component production and logistics infrastructure.

    The automotive sector is widely regarded as a catalyst industry due to its linkages to steel, plastics, electronics and services. Policymakers contend that deeper regional integration could support the emergence of a pan-African automotive ecosystem, improve competitiveness and expand consumer access to locally assembled vehicles. The formal sign-off by the African Union brings the AfCFTA automotive framework into effect, placing implementation at the centre of the next phase of continental trade integration.

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