We want decent jobs! Sustainable investments in the SSA auto industry - IndustriALL Global Union
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We want
decent jobs!
Sustainable investments in the SSA auto industry
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.
When looking at the global automotive industry, much attention is paid to traditionally established industries in the Global North (Europe, US, Japan) and to emerging giants in the Global South (China, Mexico, Brazil etc.). Across the African continent, few stories are known. Several African countries are, however, industrialisation process and not to further industrialising and actively promoting lag behind. Some of them have designed their auto industries, trying to attract targeted industrial policies (Ghana, Kenya, investments and to develop a local Nigeria, South Africa) and most have manufacturing base. Amongst these signed agreements with the major global are Ghana, Ethiopia, Kenya, Namibia, auto players (VW, Nissan, BMW, Toyota, Nigeria, Rwanda and South Africa. etc.). While structural issues persist – poor They are all actively trying to attract infrastructure, uneven distribution of domestic or foreign investments skills, financial instability, inequalities, through different kinds of incentives (tax etc. – all these countries own resources, exemptions, establishment of SEZs, etc) capabilities and skills, and show high and some are exploring innovative options potential for growth and development. for sustainable and greener growth (e.g. They also show a commitment to own their EVs in Ethiopia and Rwanda).
Developing the
industry and attracting
investments
Ghana Ethiopia
Ghana has included both Ethiopia has also listed the
financial (tax and import duty engineering-automotive sector
exemptions) and non-financial as a key priority in its Growth and
(e.g. ban on the import of Transformation Plan II (GTPII),
overaged vehicles) incentives given its potential to create
in the 2019 Ghana Automobile linkages and job opportunities.
Development Policy (GADP), The country can also count on
and is trying to move from a domestic player, the Bishoftu
SKD/CKD assembly to Automotive Industry (BAI), with
domestic manufacturing. In plans to invest and localise
the meantime, the Ghanaian production. Overall, the Ethiopian
government has been government has been trying to
supporting the ‘national attract investment by offering
champion’ Kantanka Group incentives (including cheap
for example through public infrastructure and labour) and
procurement. The government preferential trade arrangements,
has also signed MoUs with big and by setting up industrial
auto players (VW, Toyota, Nissan, parks/SEZs with favourable
Sinotruk) and has declared conditions to open new plants.
their commitment to establish
the Automotive Development In addition, several Ethiopian
Industry Support Centre. companies have established
partnerships with foreign auto
firms like VW, Hyundai, KIA,
Peugeot, and Geely. Such
partnerships have also allowed
the introduction of electric and
hydrogen vehicles to the do-
mestic market. Finally, Ethiopia is
investing in energy (wind, hydro,
etc.) and infrastructure (roads,
railways and airways) to support
the development of its industry.
Developing the industry and attracting investments
Kenya Namibia
Kenya is one of the countries ac- Namibia’s automotive industry is
tively seeking to shift from simple still at a very incipient stage, but
assembly to local production. It the country hopes to become
currently has three plants under- an important manufacturing
taking some manufacturing op- and exporting platform in the
erations (Isuzu, AVA and KVM), future, mainly counting on the
all promising to expand in terms infrastructure around the Port
of new models, additional labour of Walvis Bay. At present, the in-
inputs and related services. Pol- dustry essentially operates in the
icy-wise, Kenya also has a Na- retail and aftermarket segments.
tional Automotive Policy, which One company is involved in the
aims to reduce the importation of manufacturing of vehicles for
used vehicles and to strengthen security services (Windhoeker
the public procurement of locally Maschinenfabrik) and since
produced vehicles in the next 2018 the country also hosts the
few years. Peugeot Opel assembly plant
(POAN).
Nigeria
The Nigerian auto industry went through the National Automotive Policy (NAP)
different phases of expansion and and the National Automotive Industrial
contraction, with a significant crisis Development Plan (NAIDP) (2014-
following the liberalisation, privatisation 2024)*. The country recently signed
and de-regulation imposed by the SAPs. agreements with VW, Honda, Nissan,
Since the early 2000s, the country has KIA, Ford, Hyundai and other big auto
actively tried to revive the sector, with the players. Overall, the country has tried
National Automotive Council promoting to design fiscal incentives for local
measures to discourage imports and at- manufacturing to move from SKDs
tract investments. A National Automotive to CKDs, and to counter the high
Design and Development Council (NA- importation of used vehicles through
DDC) was set up, which also designed land borders.
*The NAIDP includes a focus on investment promotion,
infrastructural development, improvement of standards,
skills and market development.
A motorbike parked at Ampersand’s
swap station in Kigali, Rwanda.
Photo by Ampersand.
Rwanda South Africa
The Rwandan automo- South Africa has a long established
bile industry, albeit at an auto industry, with major auto players
infant stage, has also seen operating on its territory (Nissan, VW,
interesting developments. Toyota, Mercedes, Ford, Isuzu, BMW).
The Rwandan govern- The country has already implemented
ment has been pursuing a several auto plans since its first market
green growth strategy, and liberalisation (MIDP, APDP) and is
companies like Safi and currently moving towards the 2035
Ampersand have started op- South African Automotive Masterplan
erations to assemble electric (SAAM). Compared to the auto indus-
motorbikes (image above), try in the other SSA economies, the
while Victoria Motors has SA auto sector is more diversified and
been testing the assembly technologically advanced. However,
of hybrid vehicles. VW CFAO the SA government, together with
Motors Rwanda is the only main industry associations (NAAMSA,
company that has been as- NAACAM), is committed to face
sembling cars in the country challenges that still remain important,
so far, but the Rwandan gov- like the development of the local
ernment has been seeking supply chain, the transformation of
to attract other foreign inves- the industry (BBBEE agenda) and the
tors, for example through the integration in a regional market. As of
establishment of SEZs. 2019 and early 2020, all OEMs and
several large component manufactur-
ers had announced investment plans,
showing confidence in the SA market.
Unfortunately, the COVID-19 crisis has
already had a negative impact on the
industry, and actual investment trajec-
tories will have to be confirmed.
Setting priorities:
local development and
decent jobs
All these initiatives are examples of the willingness to claim
ownership of the development process and to valorise the
wealth and the capabilities all these countries possess.
Structural weaknesses remain (lack of inverting the historical plundering of resourc-
infrastructure, market distortions like the es and triggering local development. It will
continuous inflow of imported components mean ensuring that any economic growth will
and used vehicles, poor regional integration, have shared social benefits, create linkages
etc.), but there is commitment to move with local economic activities and generate
on and to overcome them. The promised quality employment opportunities.
investment plans will have to be verified after
This last point will be crucial. There will be no
the ongoing COVID-19 crisis is over, but they
reduction in current poverty and inequality
do indicate confidence in the potential of
levels without the creation of more, and
these countries to grow and to expand their
decent jobs. As the countries involved in this
auto industries.
project testimony, this will be the imperative
However, it will be of supreme importance to for any future investment. The challenges are
make sure that such investments will meet huge, but will have to be faced and urgently
the actual needs of the countries involved. addressed.
For the Sub-Saharan region, this will mean
There will be no reduction in current
poverty and inequality levels without the
creation of more, and decent jobs.The labour issue:
current challenges
Ghana Kenya
As reported by Ghana, the Despite a relatively established
majority of the workforce auto industry and existing unions,
is engaged in vulnerable vulnerable employment persists
employment (76,4%), and in Kenya, too, with fixed-term and
is not trained on developing piece-rate contracts still frequent
the skills needed by the in the sector. The workers on
industry. piece-rating arrangements are
those suffering the most precar-
ious conditions, and the most
difficult to unionise. This catego-
Ethiopia
ry of workers experiences high
As the Ethiopian case job insecurity, is easily replaced,
confirms, poverty wages are and often has no written working
still used as a competitive agreement. Outside of a pool
advantage and minimum of ‘formal’, but still vulnerable
wage thresholds are rarely employment, up to 84% of the
respected; structures for Kenyan workforce is reported
social dialogue are generally to belong to the informal sector,
weak and collective bar- where insecurity is even higher.
gaining systems are often
obstructed by only granting
firm-level negotiations Namibia
(if any). In many cases,
bargaining agreements and In Namibia, vulnerability and
workers’ rights have actually persistent inequalities also
been suspended during emerge strongly: salaries are
the COVID-19 pandemic, to still far from a proper living
allow firms easier maneuver- wage; race and gender based
ing to face the crisis. This led discriminations are frequent;
to easier lay-offs and even social protection is still scant and
worse working arrange- union density is very low. With
ments. frequent anti-union behaviours
put in place by employers in
the industry, there is no central
bargaining system.The labour issue: current challenges
Nigeria Rwanda
In Nigeria, following Linked to the early stage of
the SAP crisis in the the industry, social dialogue is
1980s, privatisation and weak or almost non-existent
deregulation in the sector in the Rwandan case. Many
led to rising unemployment, workers are still extremely
increasing levels of vulnerable, employed with
casualisation, informalisation no written contract, with no
and outsourcing. Today, access to social security and
only in the automotive unaware of their rights. No
industry, up to 70% of the minimum wage has been fixed
workforce is employed on a yet, and the pool of informal
casual/contract basis. Such workers is still extremely
processes were followed by wide (especially within small
reduced union capacity and component manufacturers
declining membership. and auto repair services).
Unionisation in the sector is still
very low.
South Africa
In South Africa, social dialogue
and collective bargaining in
the auto industry are amongst
the strongest on the continent.
However, challenges still remain:
employment growth has not
occurred as expected, and In South Africa,
a-typical forms of work are on
the rise, channelled by the use
social dialogue
of labour brokers. While this has and collective
been relatively contained within bargaining in the
large assembling companies, it is
still frequent amongst component auto industry
suppliers and down the value are amongst the
chain. Overall, the role taken
by NUMSA in the discussion of strongest on the
industrial policies, investment continent.
plans and as part of the collective
bargaining process can certainly
provide important lessons.A decent work
agenda for the SSA
auto industry
Indeed, without investments and expansion of the industry there will be no
benefits and no employment will be generated. But how will we guarantee
that investments will be sustainable and will translate into decent jobs,
helping to lift the most vulnerable workers out of poverty and precarity,
whilst contributing to confront the challenges highlighted above?
In this, the role of trade unions will be crucial.
Unions will have to apply Unions will have to fight Unions will have to
pressure to make sure that to protect vulnerable struggle and build
growth and expansion will workers, to make sure bridges across the
mean local development, that their poverty and continent, to raise
and that benefits and insecurity will stop being awareness, unity and
wealth created will not be used as an advantage to solidarity.
plundered again. the bosses.How? Here follows some inputs we put together,
hoping they may represent some building blocks
towards a continent-wide discussion on a sustainable
auto industry, gathering workers and unions’ voices,
saying out loud, “We want jobs, and decent jobs!”
01 02
Trade unions should be consulted in A joint effort should be made to
investment decisions and involved re-energise and strengthen union
in industrial policy planning. The organising
participation of the SA NUMSA in
Specifically where this is weak or
the SAAM and the previous ASCCI
where union density is low: beyond
initiative represents a positive
OEMs and along the supply chain, in
example. Once involved, the unions
newly formed companies where union
should more strongly advocate
presence is obstructed (e.g. Nigeria)
for localisation, local supply chain
or where anti-union sentiments persist
development, and in direction of all
(e.g. Namibia, Rwanda).
those segments with a higher potential
for employment creation.
03 04
More support is needed to develop More support would be needed to expand
structures for social dialogue, the collective bargaining coverage,
specifically where this is weak or specifically in the contexts where plant/
absent (e.g. Ethiopia, Rwanda). firm level bargaining is imposed or
dominant (e.g. Ethiopia, Namibia).
05
Stronger political strategies should be implemented to secure Minimum
Wage Agreements, specifically where these do not exist, or where they
have been promised but never enacted (e.g. Rwanda, Namibia).06 07
More capacity-building initiatives Stronger and more effective
should be organised, involving both strategies are needed to counter
workers and union leaders, on issues processes of casualisation,
such as collective bargaining, skills informalisation, outsourcing and the
development, labour laws etc. increasing employment of workers
on short-term contracts. See Kenya’s
piece-rating system, as well as Nigeria
and Rwanda. Keeping a vigilant eye on
08 the impact of the ongoing COVID-19
crisis will also be crucial.
Looking at the COVID-19 crisis,
unions will have to make sure that all
temporary suspensions of workers
and union rights are lifted (e.g.
Ethiopia). 09
The harmonisation of OSH policies
at sectoral level is urgently needed,
10 especially in light of the experienced
pandemic.
Regional Framework Agreements
and Regional OEM Union Networks,
per company but across countries.
These could be created to strengthen
international dialogue and develop
common strategies. This could build on
the existing IndustriALL umbrella.
Towards decent jobs
for all, a luta continua!Industriall SSA Regional Office +27 11 242 86 80 aro@industriall-union.org
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