Caretaker Trade Minister commissions VW assembly plant

The Caretaker Minister of Trade and Industry, Samuel Abu Jinapor, has commissioned a Volkswagen (VW) vehicle assembly plant in Tema. 

With the opening of the €8million facility, the parent company, VW, will take over the vehicle assemblying responsibility from its licensed importer in Ghana, Universal Motors Limited (UML).

With an installed capacity of 5,000 units per annum, the new facility will assemble the T-Cross, Tiguan, Amarok and Virtus models of the VW range of vehicles, creating 80 jobs, including local third-party service suppliers.

By the new facility, the country becomes the fourth assemblying location for VW vehicles in sub-Saharan Africa, joining the league of South Africa, which is host to the company’s largest assemblying plant, and Kenya and Rwanda.

Importance

Speaking at the ceremony to commission the plant at the Tema Freezones enclave last Wednesday, Mr Jinapor said the government realised the importance of the automotive sector to economic growth, skill development and technology transfer.

He said an automotive component manufacturing policy would strengthen the incentive and regulatory framework for investment in component and parts manufacturing in the country.

The ongoing implementation of the Ghana Automotive Industry Policy, Mr Jinapor said, required the need to further enhance the availability of certified parts and assemblying components to drive the export of made-in-Ghana vehicles to other parts of the continent under the African Continental Free Trade Area (AfCFTA).
“The automotive and the manufacturing industries are key strategic sectors globally and noted for stimulating economic growth and transformation and powerful drivers for skill employment, foreign and domestic partnership, local supply chain development, innovation and technology transfer,” he pointed out.

The minister also said the forward and backward linkages in the automotive industry could trigger an integration with other industrial sectors that would lead to economic growth and the creation of sustainable jobs, while enhancing value addition to local resources.

For that reason, the government, he said, was promoting integrated aluminium and steel industries through the Ghana Integrated Aluminium Corporation (GIADEC) and the Ghana Integrated Iron and Steel Development Corporation (GISDEC) to support the automotive industry.

VAT
Additionally, Mr Jinapor said, the ongoing implementation of a zero rating of value added tax (VAT) on the sale of locally assembled vehicles was aimed at making them cheaper for the end users.

“We are actively engaging member states under AfCFTA regarding the rules of origin requirement for the trading of vehicles produced on the continent and it is our hope that Ghana, which currently hosts six original equipment manufacturers with assembling plants in the country, will become the hub for the assemblage of vehicles for the domestic and the international markets,” he said.

Present at the ceremony were the Deputy German Ambassador to Ghana, Sivine Jansen; the South African High Commissioner to Ghana, Lulu Xingwana, some members of the Parliamentary Select Committee on Trade and Industry, among many industry players.

AfCFTA

The Industrial Development Advisor to the Secretary General of AfCFTA, Themba Khumalo, said AfCFTA remained excited about the opening of the facility and many other businesses striving to operate under the agreement.

Presently, 47 African countries out of 54 had ratified the agreement, a testament that progress was being made for holistic trade among member states, he said.

“The implementation of the payment systems between Ghana and Nigeria is an added value to the progress being made,” Mr Khumalo said.

VW

The Chairperson and Managing Director of the Volkswagen Group South Africa, Martina Biene, for her part, said VW believed in long-term investments which were nurtured through mutual relationships with like-minded partners.

She said the country’s Automotive Development Policy remained the blueprint automotive policy in the region in terms of intentionally creating an enabling environment for the establishment of a thriving sector.

“Volkswagen is the first automotive company to benefit from the incentives offered by the policy and our company has identified sub-Saharan Africa as an important region for the long-term sustainability of our business, especially at a time when major global economies are moving away from internal combustion engines to battery/electric vehicles to reduce carbon footprints,” Ms Biene said.

Welcome address

The Managing Director of VW Ghana, Jeffery Oppong Peprah, in his welcome address, said the production processes were in line with the necessary safety standards that existed in Europe and the Americas in vehicle manufacturing and assemblage.