Gov’t hints of  incentives for auto makers

By Eugene Davis

The Minister of Trade and Industry, Kobina Tahir Hammond, has said that he intends to engage  the Finance Ministry on the Legislative Instrument(L.I) announcing the effective date of implementation for all outstanding commitments in the provisions of the Customs (Amendment) Act, 2020 (Act 1014).

The Act seeks to provide incentives for automotive manufacturers and assemblers registered under the Ghana Automotive Manufacturing Development Programme provide import exemptions for the security agencies and officers of the security agencies and for related matters.

It intends to discourage the importation of second-hand vehicles and encourage the assembling of automobiles in the country.

In a speech read for him at the commissioning of the newly built state-of-the-art Rana Motors Assembly Plant in Accra, Mr Hammond said the decision will significantly scale up production to full or optimal rates of capacity utilisation for the companies.

“This is a fundamental provision also for major investment in local component manufacturing to start, as confirmed in my first few engagements with potential investors on the proposed Component Manufacturing Policy which seeks to incentivise local suppliers and component manufacturing,” the minister added.


He expressed dissatisfaction that the country is yet to attract a component manufacturing firm, claiming that it is not in Ghana’s best interest.

Mr Hammond referred to his visit to assembly plants in operation, and hoped that the country graduates to a Complete-Knocked-Down assembly, “where almost all components are not only assembled locally, but a substantial proportion, at least 30 to 40 percent initially, consists of components and parts manufactured in Ghana for assemblers and the after-sales market.” 

According to him, measures are being undertaken to complete stakeholder engagement under Ghana’s proposed Components Manufacturing Policy.

“We are targeting policy support to the private sector to invest in the local manufacturing of components and parts, starting with low-hanging fruits such as electric harnesses and wires, rubber extrusion parts, air and oil filters, lead acid batteries, shock absorbers, exhaust systems, steel wheel rims, brake system components, windscreens, and wiper blades,” he said.


Additionally, Mr Hammond disclosed that the start of commercial production in the facility signifies yet another milestone along Ghana’s ambitious journey to become the foremost automobile assembly and components manufacturing hub in West Africa and a bona fide producer of “Assembled-in-Ghana” global vehicle brands.

He believes the investments in the automotive industry, if harnessed properly, will enable assemblers such as Rana Motors and emerging component manufacturers to easily connect to regional markets and supply chains in West Africa and across Africa under ECOWAS and the African Continental Free Trade Area (AfCFTA).

“This will open up very significant and sustainable opportunities for job seekers, distributors, suppliers, small-scale industries as well as repair and maintenance service providers nationwide, as is the case in other modern hubs of the African Auto Industry, represented mainly by Morocco, Eqypt and South Africa but now featuring Ghana, prominently as the new kid on the block,” he pointed out.

The Trade Minister also noted that the development is evidence Ghana is on its way to a revolutionary development in terms of the automobile industry.

“President Akufo-Addo is determined we change route and we do so by way of industrialisation. Our industrialisation is done on the back of the automobile industry,” he added.

In order to further the government’s agenda for economic growth, skill development, job creation, and export diversification, K. T. Hammond urged the company to continue working with the government to create a modern automotive sector.

Assembly plants

The Rana Motors’ plant becomes the third vehicle assembly plant established for the commercial production of global brands in Ghana.

In addition to Kantanka Automobile Limited, Ghana now has five new assembly plants producing nine brands of vehicles, namely VW, Toyota, Suzuki, Nissan, Peugeot, Hyundai, Changan, ZX Auto and now KIA.

President Nana Akufo-Addo’s steadfast commitment and support for the implementation of programmes under the Ghana Automotive Development Policy was approved by Cabinet in October 2019 to create a fully integrated automobile manufacturing hub in Ghana, barely two years after he assumed office.

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