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Volkswagen starts Ghana assembly after a ban on used car imports

GERMAN automotive giant Volkswagen has begun assembling cars in Ghana after a partial government ban on importing used cars, reports Bloomberg News

09 August 2020 - 19:00

GERMAN automotive giant Volkswagen has begun assembling cars in Ghana after a partial government ban on importing used cars, reports Bloomberg News.

The ban initially began to help turn the West African country into an automotive hub for the region's 380 million people.



Volkswagen will assemble vehicles through Universal Motors Ltd and the facility will target fully installed capacities of 5,000 cars a year reports the head of Volkswagen sub-Sahara region Thomas Schaefer.



'Once the policy has been fully implemented and elements such as vehicle financing are in place, Ghana will have a capacity for 300,000 new cars a year,' said Volkswagen Ghana chief Jeffrey Oppong Peprah.



Automakers such as Nissan, Toyota, Suzuki and Renault are measuring the local arrangement of vehicles in a country where used cars are 70 per cent of vehicle imports.



Ghana banned imports of used cars older than 10 years in May and wants to leverage a continental free-trade deal to become West Africa's production hub.



The commerce that was due to start on July 1 has been delayed due to the Covid-19 pandemic set back. The pandemic has affected trade in goods and tariff concessions.



The plan is expected to be fully operational by 2030, which means African Continental Free Trade Area (AfCFTA) would be the world's most significant free-trade zone by area. The area will have a potential market of 1.2 billion people and a gross domestic product of US$2.5 trillion.



'Vehicles are among the top elements of Ghana's import bill of about $12 billion. There's absolutely no doubt that this effort is going to help us save scarce foreign-exchange resources. It is also creating an opportunity for us to earn significant amounts of foreign exchange,' said Trade Minister Alan Kyerematen.


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