Ghana’s automotive industry stands at a pivotal crossroads, with the potential to evolve from a vehicle assembly hub into a fully integrated manufacturing powerhouse. However, achieving this transformation requires a strategic overhaul of fiscal policies, infrastructure development, local component production, and market demand stimulation. These insights were central to the third and final roundtable discussion of the Citi Business Festival 2026, themed “Driving Ghana Forward: The State of the Automotive Assembly Industry and Its Contribution to the Economy.”
The event, moderated by industry leaders and policymakers, brought together Chief Executive Officer of Japan Motors Ghana, Salem Kalmoni; Head of Strategic Manufacturing at the Ministry of Trade, Agribusiness and Industry, Kwasi Ofori-Antwi; Team Lead of the Ghana Partnership for Jobs and Economic Transformation (JET) Programme, Eugene T. Sangmortey; CEO of Volkswagen Ghana, Jeffrey Oppong Peprah; and Economist at the University of Ghana, Professor Ebo Turkson. Their collective expertise underscored both the progress and persistent challenges in Ghana’s automotive sector since the Ghana Automotive Development Policy (GADP) was launched in 2019.
1. Restoring Fiscal Incentives for Competitive Edge
One of the most pressing issues discussed was the reintroduction of tax incentives, particularly the VAT exemption for locally assembled vehicles—a policy that previously bolstered their competitiveness against imported used cars.
Jeffrey Oppong Peprah, CEO of Volkswagen Ghana, highlighted the economic disparity:
“The VAT exemption was a game-changer. Last year, we could sell a brand-new, locally assembled vehicle at a price comparable to a seven-year-old imported used car. This incentive directly benefited consumers by making new vehicles more affordable. Without it, locally assembled cars lose their edge.”
Currently, the government is evaluating a 20% VAT exemption for locally produced vehicles, a move that could reignite demand. Salem Kalmoni, CEO of Japan Motors Ghana, noted that while Ghana’s automotive assembly industry remains highly competitive—with 10 active assemblers and seven plants—the sector still grapples with price wars driven by imported used cars.
“The cumulative tax burden on imported vehicles—ranging from 20% to 21.9%—has driven prices down, but it has also intensified competition. Locally assembled vehicles must regain their pricing advantage through targeted incentives,” Kalmoni stated.
2. Stimulating Demand Through Public Procurement and Financing
To sustain growth, stakeholders emphasized government-led demand creation as a critical catalyst. Professor Ebo Turkson argued that mandating local procurement for state agencies could accelerate economies of scale, reducing production costs and improving competitiveness.
“If government enforces the purchase of locally assembled vehicles, assemblers will achieve higher production volumes, leading to cost reductions. This is a win-win: lower prices for consumers and a stronger domestic industry,” Turkson explained.
Additionally, expanding vehicle financing options was identified as a key strategy. Asset-backed lending schemes could enable Ghanaians to access credit for locally assembled vehicles, increasing market penetration.
“The financial sector must play a bigger role. If financing is structured correctly, more Ghanaians will opt for new, locally made cars instead of used imports,” Turkson added.
3. Expanding Local Component Manufacturing: The Supply Chain Imperative
While vehicle assembly has seen growth, local component production remains underdeveloped. Kwasi Ofori-Antwi, Head of Strategic Manufacturing, revealed that the Ghana Automotive Component Manufacturing Policy is currently under Cabinet review and aims to strengthen domestic supply chains.
“We are engaging artisans, informal manufacturers, and formal sector players to build a robust automotive ecosystem. For instance, Suame Magazine—a hub of informal manufacturing—has immense potential. We are establishing an advanced laboratory there to support metal alloying and component testing,” Ofori-Antwi disclosed.
A breakthrough in local fastener production was also announced. Eugene T. Sangmortey, Team Lead of the JET Programme, confirmed that Ghana will begin producing bolts, nuts, and springs domestically in Q3 2026, supported by the JET Programme and UK investments.
“This marks a significant milestone. By empowering local firms, we reduce dependency on imports and create high-value jobs,” Sangmortey stated.
4. Enhancing the Business Environment for Long-Term Growth
Beyond fiscal policies, operational challenges—such as high electricity costs, exchange rate volatility, and poor infrastructure—were identified as major barriers. Professor Turkson stressed that reducing the overall cost of doing business would have a more sustainable impact than temporary tax breaks.
“A conducive business environment—stable electricity tariffs, predictable exchange rates, and efficient logistics—will attract more investment than incentives alone. If the ecosystem works, businesses will thrive without needing subsidies,” Turkson argued.
Additionally, stricter enforcement of vehicle certification standards was proposed to level the playing field between imported used cars and locally assembled vehicles.
5. Leveraging AfCFTA for Regional Leadership
Ghana’s automotive policy has already become a regional benchmark. Jeffrey Oppong Peprah noted that 23 African countries recently visited Ghana to study its automotive development framework under AfCFTA (African Continental Free Trade Area).
“Our policy is a model for Africa. If we cross the finish line—achieving full manufacturing capability—Ghana can position itself as a regional automotive hub, exporting vehicles and components across West and Central Africa,” Peprah said.
The Path Forward: Policy Consistency and Industry Collaboration
The consensus among panelists was clear: Ghana must transition from assembly to full-scale manufacturing through:
– Restored fiscal incentives (VAT exemptions, tariff reductions).
– Government-led procurement to stimulate demand.
– Expanded local component production (fasteners, spare parts, engines).
– Improved infrastructure and business environment (electricity, logistics, exchange stability).
– Regional integration under AfCFTA to dominate West Africa’s automotive market.
With six major global automotive brands already investing in Ghana, the nation is poised to become a manufacturing powerhouse—but only if policy consistency, industry collaboration, and market demand are prioritized.
Panelists at the Citi Business Festival 2026 discuss strategies to elevate Ghana’s automotive industry beyond assembly.
