EAC/JICA Automotive industry expert meeting kicks off in Nairobi
A broad spectrum of stakeholders and experts from the Automotive Industry, Finance, Customs and Trade sectors as well as vehicle manufacturing company representatives from the EAC Partner States embarked on a three-day meeting at the Sarova Panafric Hotel in Nairobi, Kenya.
The main objective of the meeting, which is organized by the EAC and the Japan International Cooperation Agency (JICA), is to review and validate the progress report of the Comprehensive Study on Automotive Industry and provide inputs towards finalization of the same and also inform the EAC and potential private sector investors (both foreign and domestic) on policy options and modalities to promote and develop the motor vehicle industry in the region.
The EAC Heads of State Summit have on various occasions reiterated the need to promote motor vehicle assembling in the region, given the huge potential that can be realized from a thriving iron ore extraction and beneficiation industry that can in turn, lay the foundations for a globally competitive steel production industry on a scale to support the establishment of an automotive industry in East Africa.
Cognizant of this, the 16th Ordinary Summit of the East African Community Heads of State of 20th February 2015 “directed the EAC Council of Ministers to study the modalities for promotion of motor vehicle assembly in the region, and to reduce the importation of used motor vehicles from outside the community, and to report progress to the 17th Summit.”
The Director for Productive and Social Sectors at the EAC Secretariat, Mr. Jean Baptiste Havugimana, for the EAC Secretary General, said that road transport was the most predominant mode of transport across the EAC region due to its affordability and flexibility.
“The automotive industry is a major industrial and economic force worldwide. It makes 60 million cars and trucks a year, and is responsible for almost half the world's consumption of oil. In addition, the industry employs 4 million people directly, and many more indirectly," Mr. Havugimana said.
Mr. Havugimana said that the EAC had made a strategic decision to invest in the motor vehicle industry as a way of diversifying the regional manufacturing base which at the moment relies heavily on raw agriculture commodities.
It is anticipated that the development of an automotive industry will create more jobs and reduce transportation costs. The industry also has the potential to contribute to foreign exchange reserves, if some of the vehicle parts currently imported are competitively produced within the EAC Region.
To reap the full benefits from the industry, it will be vital to nurture it. To do so, the EAC Secretariat has been tasked to speed up work on a comprehensive study on the bloc’s automotive industry to help decision makers plan better and put in place modalities that will support similar initiatives and promote the automotive industry.
In his remarks, Mr. Julius Kirima, the Acting Deputy Director of Industries in Kenya’s Ministry of Industry, Trade and Cooperatives acknowledged the generous support extended by the Japanese government through JICA to facilitate the study on the automotive industry in East Africa.
Mr. Kirima noted that the study gives ample opportunity to chat the way forward towards promotion of intellectual development, production of quality automotive products and increased employment opportunities within the region.