In a well-controlled economy, stringent policies and guidelines are put in place to control the importation and use of such value products like automobiles. However, that has not been the case in Ghana where many grey importers exist who knowingly or unknowingly import vehicles that are damaged, environmentally not friendly, or simply not roadworthy.
The Managing Director for Japan Motors Trading Co. Ltd, Salem Kalmoni, has described the current landscape of the automobile industry as a mess and uncontrolled. However, he believes the passing of the automobile bill which allows for the assembly of automobiles in the country for both the domestic market and West Africa Sub-Region will usher in some sanity.
Importation of old and damaged cars
In a news report, Saleem Kalmoni was disturbed by how the country allows the importation of damaged cars and cars older than 10 years. In a rhetorical question, he asks why the country takes in damaged and rejected vehicles from Europe because it doesn’t bode well for the country.
He further said a glance at our neighbours such as Ivory Coast and Senegal have limits of 5 years and 7 years respectively. Beyond those limits, such vehicles cannot be imported into the country. When asked about “how many years he wants vehicles to come in?” He says “10 years is a reasonable cut-off.”
Some section of the public is of the view that these rejected vehicles are affordable in comparison to brand new cars. Like one user commented concerning the news report, “… most Ghanaians (and Africans in general) cannot afford brand new cars now and most likely not in the near future and they depend heavily on used cars…”
Customs (Amendment Bill), 2020
That’s given, but that notwithstanding, the Customs (Amendment) Bill, 2020 seeks to amend the Customs Act, 2015 (Act 891) to provide incentives for automotive manufacturers and assemblers registered under the Ghana Automotive Manufacturing Development Programme (GAMDP) to begin operations in Ghana.
The bill will disallow the importation of salvaged motor vehicles which comprises wrecked, destroyed, or physically damaged by fire, water, or other incidents as well as specified motor vehicles over 10 years of age into the country. This I believe is a step in the right direction provided there are strict implementation and the mopping out of corruption at the ports.
In March, during the approval of the joint report of Trade and Finance committee, Deputy ranking member for the Trades Committee and Tamale Central MP Inusah Fuseini, was of the view that the bill will affect the business of many people more especially, car dealers.
But Information Minister Kojo Oppong Nkrumah and Trades Minister Alan Kojo Kyerematen disagreed. They were of the view that the bill will not only create jobs but make brand new vehicles affordable for purchase.
Concerning duties and taxes, Salem Kalmoni said car manufacturing companies assembling in the country need to have tax incentives due to it being a “big investment.”
The bill is said to lead to an estimated revenue loss of approximately GH802.25 million for the first three years.
The current bill offers growing opportunities for the automobile industry in the area of creating jobs and making brand news cars more affordable.
Moreover, as rapid industrialization takes hold of many African countries, the market for automobile spare parts is becoming a lucrative sector for businesses supplying such goods as lubricants, ball bearings, and other mechanical accessories.