The Auto Industry in Sub Saharan Africa: Investment, Sustainability and Decent Jobs
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The Auto Industry in Sub Saharan Africa: Investment, Sustainability and Decent Jobs www.industriall-union.org/affiliates/south-africa All activities in the Sub-Saharan Africa region are organised through the regional office located in Johannesburg, South Africa. Project commissioned by: FES Trade Union Competence Centre 34, Bompas Road, Dunkeld West, Johannesburg +27 10 446 8612 +27 11 341 0271 [email protected] www.fes-tucc.org Industriall SSA Regional Office North City House Office S0808 (8th Floor) 28 Melle Street, Braamfontein, Johannesburg 2001 PO Box 31016, Braamfontein, 2017, South Africa +27 11 242 86 80 +27 11 403 1546 [email protected] Introduction Research team Lead Researcher: Lorenza Monaco, University of Johannesburg Country Researchers: Kwabena Nyarko Otoo (Ghana), Sisay Tulu (Ethiopia), Paul Omondi (Kenya), Michael Uusiku Akuupa, Kudzai Chireka, Sophia Isala (Namibia), Ismail Bello, Lai Brown (Nigeria), Remy Ruberambuga (Rwanda), Mario Jacobs, Shane Godfrey (South Africa) Research Coordinators: Georg Leutert, Kenneth Mogane, Paule Ndessomin (IndustriALL), Iris Nothofer, Bastian Schultz (FES South Africa) Partners: FES Trade Union Competence Centre for Sub-Saharan Africa (FES TUCC) Johannesburg and National Offices in the respective countries IndustriALL Global Union, Sub-Saharan Regional Office Johannesburg CETU & Industrial Federation of Construction, Wood, Metal, Cement & Other Trade Unions Ethiopia Industrial & Commercial Workers’ Union (ICU) Ghana Amalgamated Union of Kenya Metalworkers (AUKMW) Kenya Metal and Allied Namibian Workers' Union (MANWU) Namibia SEWUN, AUTOBATE Nigeria National Union of Metalworkers’ of South Africa (NUMSA) South Africa CESTRAR, COTRAF Rwanda www.industriall-union.org 1 Section 1 Summary While much attention has been paid to the lack of structural transformation or to processes of premature deindustrialisation, a number of Sub Saharan African countries have actually made important steps in the development of a manufacturing sector, and have attracted increasing investment towards an emerging auto industry. The present report specifically fo- electric vehicles and the promotion persist in Namibia; poverty wages cuses on seven countries that have of greener mobility. are still used as a competitive either experienced a flourishing au- advantage in Ethiopia; and social tomotive sector or that show prom- Overall, the auto industries in these protection is scant and anti-union ising prospects of future expansion: seven countries reveal significant behaviours are frequent in Namibia Ghana, Ethiopia, Kenya, Namibia, potential to attract future invest- and Nigeria. It is therefore urgent Nigeria, Rwanda and South Africa. ment and to further expand. For to intervene in order to expand em- sustainable growth, however, ployment opportunities and secure Although structural weaknesses important policy challenges must be quality occupations. This is where persist (poor infrastructure, uneven addressed. From an industrial devel- unions are called in, to embrace distribution of skills, lack of real mar- opment perspective, the large inflow challenges, build capacity among ket integration, etc.) these seven of used vehicles and the prevalence workers and leaders, and to ulti- countries have all demonstrated a of SKDs/CKDs assembly still weigh mately make sure that investment commitment to grow the industry by against the establishment of a local plans translate into decent oppor- implementing targeted policies and manufacturing base. This should tunities for the most vulnerable and establishing partnerships with big be promoted more proactively, by less protected workers. auto players. Countries like Ghana focusing on increasing localisation (Ghana Automotive Development and deepening the local supply Indeed, an effective union interven- Policy, GADP), Kenya (National chain. Measures to support domes- tion will have to entail: Automotive Policy, NAP), Nigeria tic demand for new vehicles, like • the promotion of social dialogue (Nigerian Automotive Industry incentives and financing schemes, where this is not sufficient Development Plan, NAIDP) and should also be developed or South Africa (current South African enhanced. Issues related to urban • the development of stronger Auto Masterplan, SAAM) formulat- mobility and environmental sustain- systems of collective bargaining ed targeted auto plans to develop ability also emerge as increasingly and of minimum wage agree- their industries. Kenya, Rwanda, pressing matters. ments where they are missing Ethiopia, Ghana and Nigeria signed • the extension of social protec- memorandums of understanding The most compelling objective, tion and OSH policies to all. (MOU) with Volkswagen, Toyota, however, remains the creation of Nissan, BMW and other big auto more decent jobs. This is especially • All this, while keeping a vigilant companies to establish vehicle pressing considering how vulner- eye on the impact of the current assembly facilities, assess future able and informal employment COVID-19 pandemic to ensure mobility concepts and launch train- remain the norm in Ghana, Rwanda that the crisis does not evolve ing centres for production and after and Kenya; casual and precarious into further losses for workers, sales. Ethiopia and Rwanda are ex- forms of work continue to increase precarity and violations of the ploring paths for the production of in Nigeria; gender and race divides rights of workers and unions. 2 The auto industry in Sub Saharan Africa: Investment, sustainability and decent jobs Introduction Abbreviations AAAM African Association of Automotive DTIC Department of Trade, Industry and Manufacturers Competition ACFTA African Continental Free Trade ECOWAS Economic Community of West Area African State AGI Association of Ghana Industries EDPRS Economic Development and Poverty Reduction Strategy AGOA African Growth and Opportunities Act EEF Ethiopian Employers Federation AITF Automotive Industry EEP Ethiopian Electric Power Transformation Fund EIC Ethiopian Investment Commission AMCE Automotive Manufacturing FBU Fully Built Units Company of Ethiopia FC, T&PIWTU Federation of Commerce, AMEO Automobile Manufacturers Technique and Printing Industry Employers’ Organisation Workers’ Trade Union AMH Associated Motor Holding FDI Foreign Direct Investment ASCCI Automotive Supply Chain FDRE Federal Democratic Republic Competitiveness Initiative Ethiopia AUKMW Amalgamated Union of Kenya FES Friedrich Ebert Stiftung Metal Workers FKE Federation of Kenya Employers AVA Associated Vehicle Assemblers FRA Fiscal Responsibility Act BAI Bishoftu Automotive Industry GADP Ghana Automobile Development BSC Bachelor of Science Policy CBA Collective Bargaining Agreement GDP Gross Domestic Product CESTRAR Rwanda Trade Unions GIPC Ghana Investment Promotion Confederation Centre CETU Confederation of Ethiopian Trade GRIPS Graduate Institute for Policy Union Studies CKD Complete Knock Down GSS Ghana Statistical Services COMESA Common Market of Eastern and GTP Growth and Transformation Plan Southern Africa ICU The Industrial and Commercial COTRAF Congress of Labour and Workers’ Union Brotherhood ILO International Labour Organisation COTU Central Organisation of Trade Unions www.industriall-union.org 3 Section 1 Abbreviations IPRC Integrated Polytechnic Regional NEASA National Employers’ Association College of South Africa ITUC International Trade Union NEF Namibia’s Employers Federation Confederation NIC National Investment Corporation KVM Kenya Vehicle Manufacturers NSA Namibia Statistics Agency LRA Labour Relations Act NUMSA National Union of Metalworkers of M & Z Metje and Zigler South Africa MANWU Metal and Allied Namibian OEM Original Equipment Manufacturers Workers Union OICA International Organisation of MEIBC Metal and Engineering Industries Motor Vehicle Manufacturers Bargaining Council OSH Occupational Safety and Health MetEC Metal and Engineering POAN Peugeot Opel Plant Assembly Corporations PSF Private Sector Federation MIBCO Motor Industry Bargaining Council RDB Rwanda Development Board MIDP Motor Industry Development Plan RFA Regional Framework Agreement MIFOTRA Ministry of Public Service and Labour REM Rwanda Electric Mobility MINEDUC Ministry of Education RMC Rwanda Motorcycle Company MITSMED Ministry of Industrialisation, Trade RMI Retail Motor Industry and SME Development RSSB Rwanda Social Security Board MLIREC Ministry of Labour Industrial SAAM South African Automotive Relations and Employment Masterplan Creation SHC State Housing Company MNC Multinational Corporations SKD Semi Knock Down MoF Ministry of Finance SSA Sub Saharan Africa MOLSA Ministry of Labour and Social Affairs UN United Nations MOTR Ministry of Transport USD United States Dollar MOU Memorandum of Understanding VMIATSA Vehicles, Machinery Importers and Assemblers Trade Sector National Association of NAACAM Association Automotive Component and Allied Manufacturers VW Volkswagen NAAMSA National Association of WHO World Health Organisation Automobile Manufacturers of WMF Windhoeker Maschinenfabrik South Africa (Pty) Ltd NBF National Bargaining Forum 4 The auto industry in Sub Saharan Africa: Investment, sustainability and decent jobs Introduction Tables Table 1. Ghana’s macroeconomic performance before the COVID-19 outbreak 12 (2016-2019) Table 2.: Total Imports and Import of Vehicles 15 Table 3. The SA auto industry on a continent scale 56 Table 4. Investment plans of SA OEMs 60 Table 5. Investment plans, SA component manufacturers 61 Table 6. Ghana’s workforce per employment