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Ghana’s automotive companies either didn’t do their homework or someone overpromised things to them

automotive companies

I hear that there was a good discussion on Ghana's automotive manufacturing on Citi FM's CBS this morning. As my good friend @kobina puts it, “one is left with the impression that either the companies didn't do their homework or someone overpromised things to them”.

Remark

I've worked in the auto space (lots of consultancies), and the potential is great despite the recent economic issues. What is needed to unlock the latent assembling capacity that has been built since 2019 is the VEHICLE ASSET FINANCE SCHEME.

Things have slowed on the economic front, and this has hit consumer spending, but the medium-term prospects for vehicle assembling in Ghana are actually great. Salvage cars compete with the new cars assembled in Ghana; I'm for the ban over a certain age or hefty taxation on environmental/pollution grounds.

One of the linchpins of Ghana's recent industrial policy is for the country to become the hub for manufacturing and assembling automobiles in the West African sub-region. There are already 11 global and local car manufacturers (OEMs) with assembly plants in Ghana, or announced the same.

Ghana imports about 100,000 vehicles annually, of which 90% are pre-owned or used (second-hand). The local OEMs have an annual installed assembly capacity of 79,000 cars — basically, 8 out of 10 sedan cars and light vehicles on the road in Ghana can be met by local assembly. However, due to the abovementioned economic and other factors, the current assembly is around 5,000 cars annually.

Note: I'll write a full article on this later in the week with lots of data points to show the huge potential we're sitting on in the local automotive industry. I wish I had been awake this morning; I'd have called the Citi Studio. 😊

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