Ethiopia Aims to Become Africa’s Largest Carmaker

Ethiopia, whose new-vehicle market is fewer than 50,000 units per year, has high hopes of partnering with China to become Africa’s largest car producer in 15-20 years, Reuters reports.

Tadesse Haile, state minister for industry, tells the news service his aim is to make Ethiopia the African continent's top carmaker in less than two decades. That is a tall order, since South Africa and Morocco already are building roughly 600,000 and 200,000 vehicles, respectively, per year.

Today, more than 80% of Ethiopia’s cars are imported, according to Reuters. It says local manufacturers assemble about 8,000 units, most of them commercial vehicles, from kits imported from China. The country currently assemble sedans from BYD, Geely and Lifan, and Sinotruk commercial vehicles from China National Heavy Duty Truck Group.

Producers tell Reuters they could multiply their output as much as fivefold, if they could gain access to the capital to buy more kits. But Ethiopia has only about $3.3 billion in foreign reserves, according to Reuters. And the country’s central bank has been reluctant to give up large sums to foreign exchange because the country is focused on funding major infrastructure projects.

The International Monetary Fund says greater government support for the private sector is critical to Ethiopia’s growth. Minister Haile tells Reuters the government will ease exchange funding shortages “in the near future.”