The automotive industry has been boosted by the signatures of automobile giants like Volkswagen, Toyota, Suzuki, Renault and Nissan.
Meanwhile, before the introduction of the giant automakers, there was also SinoTruck from China which has been equipped and started assembling here for the local market – in a country where older vehicles make up 75% of the total number of vehicle on our roads.
The government of Ghana, as part of its transformational agenda for the automobile industry, has identified Vehicle Assembly and Automotive Components Manufacturing as a strategic anchor industry to accelerate the country’s industrial development.
Under the watch of re-elected president, Nana Addo Dankwa Akufo-Addo, the country has offered tax breaks to carmakers and promised to restrict the invasion of foreign second-hand cars. In May this year, parliament banned the arrival of cars that are more than 10-years old in a bid to lure manufacturers to invest in Ghana’s automobile industry.
As a result of this positive signal, Ghana has attracted investments in vehicle assembling from leading Original Equipment Manufacturers (OEMs) and investment partners, with positive projections of spill-overs into local automobile manufacturing.
Ghana, being the third-biggest economy country among west African countries, is likely to experience growth in the automotive industry as the ban of some imported vehicles continues – owing to the increase in ‘Made in Ghana’ vehicles initiated by Kantanka Group in 2016, and Memoranda of Understanding (MoU) among auto-giants already progressing in the country which are increasing skilled-work forces in the automotive industry.
In 2018, Mr. Yoofi Grant, Chief Executive Officer of Ghana Investment Promotion Council (GIPC), in an interview explained that the basic objectives for the automobile centre are job creation, national economy development and industrial growth, contrary to worries from second-hand vehicle dealers.
He explained, then, that government plans to halve high vehicle importation by instigating local production of vehicles through the automotive policy, and developing car financing schemes to help facilitate the purchase of new cars.
“Less than 5% of new car sales are financed by banks, according to the Ghana Automobile Dealers Association. In some cases, lenders demand employers agree to redirect part of the purchaser’s salary toward the debt; or that the owner take out insurance to cover a default. Interest rates of 22%-30% also make loans ‘largely unaffordable’,” said Koketso Tsoai, an auto-industry analyst at Fitch Solutions.