President Nana Akufo-Addo has unveiled the first locally-made Volkswagen (VW) vehicle which he says is the first of many to come in the country’s bid to becoming self-reliant.
“This will undoubtedly promote import substitution, enhance Ghanaian exports, particularly within the framework of the African Continental Free Trade Area, whose coming into force is eminent,” he said.
The launch in Accra marks the first phase the company’s operations in the country and will see the German carmaker produce three cars daily, with plans to increase the production capacity in the second phase, the firm’s Ghana Chief Executive Officer, Jeffrey Oppong Peprah, told the B&FT.
Mr. Akufo-Addo also said his government sees the challenges presented by the pandemic as an opportunity to spur domestic capabilities: “We want to deepen our self reliance, to which we want to rely on the things produce and grown, not on the things we import. Indeed, the pandemic has disrupted the global supply chain but it is also opening up opportunities for us to enhance our industrial capabilities, increase our agriculture output and generally boost Ghanaian exports.”
The unveiling of the first locally-made Volkswagen cars, Mr. Akufo-Addo added, presents a win-win opportunity for both foreign and local companies engaged in the industry’s value chain. It also puts Ghana on course to be an automobile hub in the West Africa.
“I am confident that we in Ghana are on the course of a bold new beginning in our country which will reiterate our fast receding culture of failure; we will make it,” he said with conviction.
“VW has a long history in the Ghanaian market. The cars assembled here come at a very low cost,” Mr. Peprah said, noting that cars assembled here are over 10 percent lower in term of cost than imported ones, due import duty waivers on locally assembled vehicles.
He added: “The government has supported with tax waivers and we don’t have to transfer that cost to the final consumer. So, this makes the prices very affordable compared to importing from Europe. We expect the cars assembled here to be over 10 percent cheaper that imported ones.
He further noted that discussions with financial institutions to adopt vehicle financing scheme to enable average Ghanaians to purchase the vehicles were also ongoing.
Background
VW’s investment in Ghana was announced during German Chancellor Angela Merkel’s official visit to Accra in August 2018. During the announcement the Government of Ghana and Volkswagen signed a Memorandum of Understanding to establish a vehicle assembly plant in Ghana.
Today’s official launch shows the interest of global players like Volkswagen in Ghana and West-Africa as well as the ability of Ghana to attract lighthouse investments.
“Since the signing of the MoU all sides have worked tirelessly to implement the Agreement,” a VW statement read
With the official launch of phase one of the project the first Volkswagen cars assembled in Ghana will soon be present in the streets of Ghana.
The investment comes in the framework of the G20 Compact with Africa (CwA), which was launched under Germany’s G20 Chairmanship in Berlin in June 2017. The CwA aims to bring more private investment from the G20 countries to the African partner countries, amongst which Ghana is a frontrunner.
“The African partners pledged to reform their business frameworks to make them more attractive for private investment. With the new Automotive Policy Ghana has fulfilled its pledge and paved the way for this investment. The highly globalized automotive industry has now integrated Ghana into its global value chain, which will lead to more manufacturers as well as suppliers eyeing Ghana as an investment destination,” the stated added
It also noted that the high-tech industry of car making will bring investment, skills and jobs to Ghana and broaden its industrial base and that the investment is another corner stone of the strong and deep partnership between Germany and Ghana.
