A couple of weeks ago, President Nana Addo Dankwa Akufo-Addo unveiled the first locally assembled Volkswagen (VW) vehicles in Accra, a feat that the Ghana government public relations machinery continues to spin as unprecedented and a triumph which has confounded the doubting Thomases.
Before this, members of the Majority side in Ghana’s Parliament, who belong to the president’s New Patriotic Party, passed a law, despite protestations by the Minority, banning the importation of salvaged cars and vehicles older than ten years.
The new law, they explained, is framed to encourage international companies to set up local assembly plants in Ghana.
Laudable though the MPs’ intentions and actions are, it is worth asking if the president knows much about Ghanaian endeavours in the automobile industry. There is a fledgling Ghanaian automobile industry and it craves the attention he is giving to the foreign companies.
The government is also pursuing Nissan, Toyota, Suzuki, Renault and China’s Sinotruk, offering tax breaks and a raft of other goodies to entice them to follow in VW’s footsteps.
Meanwhile, we seem oblivious that these companies have become multinationals precisely because they have been the beneficiaries of deliberate policies in their own countries which helped them grow and develop.
Engine room of Africa
As usual in Ghana, we are happily giving waivers to foreign multinationals while our own Kantanka and Neoplan and the inventiveness you find in the likes of Kumasi Suame Magazine remain abandoned. There have been many promises of industrial plans by successive party candidates who eventually became president, but none has seen the light of day.
Suame Magazine in particular has the potential to become West Africa’s automotive industrial park, creating thousands of jobs along the value chain.
If all goes to plan, Ghana will become a hub for exporting assembled cars to a potential market of 385 million people across West Africa, within the framework of the African Continental Free Trade Area (AfCFTA). However, this spirited initiative based on a model of vehicle assembling can create only a limited number of jobs.
The real opportunities for employment would come from securing franchise deals that will make it possible for Ghanaians to produce components of all the vehicles assembled in the country. We could start with the nuts and bolts, rims and tyres, and produce parts for Volkswagen’s other assembly plants in sub-Saharan Africa – namely Kenya, Nigeria, Rwanda, South Africa and possibly Côte d’Ivoire.
It is only then that the phrase “local content” would become meaningful, as selected Ghanaian shops and enclaves such as Suame Magazine could be licensed to provide after-sales service to owners of locally assembled cars, among others.
Concerted and targeted policy action of this sort would reduce our reliance on the used and salvaged automobiles that make up over 70% of vehicle imports into Ghana.
State of independence
It’s about time Ghanaians actually owned a part of a critical multinational industry – especially given that control over our economy is not in our hands. Ghana’s banking sector, as well as its hydrocarbons, mining, telecommunications and automobile industries, are dominated by foreign firms.
Self-evidently, our quest for economic independence is proving far more difficult than the fight for political freedom our forebears won over six decades ago.
Foreign dominance cannot always be in our interest. In the end, it is the owner of the food who eats, and not the hungry man.
Papa Kow Manu