3 mts read
- In a move to boost automotive production within the country, Ghana has banned the importation of cars older than 10 years
- President of Ghana Nana Akufo-Addo wants it to become an automotive hub in West Africa
In a move to boost automotive production within the country, Ghana has banned the importation of cars older than 10 years. Ghana has been a major importer of second-hand vehicles. In a major shift in its policy, the President of Ghana Nana Akufo-Addo wants it to become an automotive hub in west Africa catering to the needs of its neighbors instead of being a major market for second-hand vehicles. Used cars make up about 70 percent of vehicle imports of Ghana. The average per capita income in Ghana is $2,200, making ownership of car a luxury for many.
Apart from closing its doors to second hand and older models of vehicles from abroad, Ghana is offering major incentives to attract automobile manufacturers to set up plants in the country. Ghana’s Parliament has passed a law that provides import-duty rebates for companies that manufacture or assemble cars in Ghana. Volkswagen, Nissan, Toyota Motor Corp., Suzuki Motor Corp. and Renault SA are among automakers considering the possibility of setting up local assembly of vehicles.
The country has a robust dealer network that specializes in fixing up old, imported vehicles. Many of the most affordable Ghanaian cars are vehicles that have been involved in accidents that dealers can repair and offer at cheap prices. The government tightened the provisions to make the importation of an automobile that has been involved in an accident illegal. The new rule is bound to create problems for low-income families in need of a car, as well as repair shops.
The President signed the new provisions into law on April 30th that will come into effect this October. The changes is estimated to cost the country $143 million in customs revenue within the first three years. It will also give a major blow to the second-hand auto market.
