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AfCFTA Offers ‘Significant’ Opportunities for Morocco’s Automotive Industry – Report


  21 Février      38        Economy (15054),

   

Casablanca, 21/02/2024 (MAP) – The African Continental Free Trade Area (AfCFTA) agreement offers four significant opportunities to the Moroccan automotive sector, which is among the best developed on the continent, especially for its affordable inputs, finished exports, advantageous labor, and reduced customs tariffs, according to the 9th edition of the CFC Africa Insights report.

The report, titled « AfCFTA: unlocking the potential of intra-African trade, » suggests that increased trade integration with African partners, particularly in North and West Africa, could lead to economies of scale. Morocco is well-positioned to benefit from the establishment of cross-border value chains, while the sector also holds promise for economies across the region.

In 2022, international automotive trade reached 1.6 trillion dollars, surpassing that of crude oil and natural gas, the report notes. It also emphasizes how automotive supply chains, spanning across borders, allow numerous countries to contribute to vehicle production.

Under the AfCFTA, the Moroccan automotive sector stands to gain two key opportunities, namely access to low-cost inputs and an outlet for finished goods exports. This analysis was jointly prepared by Casablanca Finance City Authority (CFCA) and Fitch Solutions’ BMI subsidiary.

By integrating Morocco’s automotive sector with neighboring economies, Moroccan producers can capitalize on lower labor and material costs in Africa. The report highlights that Nigeria’s current tariff on unassembled cars stands at 5%, but is anticipated to decrease to 0% by 2030.

This shift could generate employment opportunities in both countries, enabling Morocco to export unassembled vehicles to Nigeria for further processing.

The presentation of this report took place on Wednesday in Casablanca, featuring BMI economist John Ashbourne at CFCA’s CFC Insights conference.

Attendees included the Minister of Industry and Trade, Ryad Mezzour, the Director General of Casablanca Finance City Authority (CFCA), Saïd Ibrahimi, and the Special Representative of the President of the African Development Bank (AfDB) for the Africa Investment Forum, Yacine Fal.

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