By on May 29, 2020

Ghana has banned the importation of cars older than 10 years in a move designed to attract automotive plants. As a major importer of second-hand vehicles, the West African nation is largely dependent upon cars discarded by other nations. However, the country’s leadership wants it to become an automotive hub for at least a healthy chunk of the continent. This is a relatively new yet persistent dream for the nation, and it includes a bizarre roster of characters we don’t quite know what to make of. 

Ending the importation of older models (sort of a reverse Imported Vehicle Safety Compliance Act) isn’t the only big change taking place in Ghana, however. According to Bloomberg, there are sweet deals being laid out for manufacturers to peruse:

The new law also provides import-duty rebates for companies that manufacture or assemble cars in Ghana, according to the act of parliament obtained Thursday by Bloomberg. The embargo will take effect six months after the manufacturing or assembling of new vehicles in Ghana begin under a special government program meant to draw investment.

Volkswagen, Nissan, Toyota Motor Corp., Suzuki Motor Corp. and Renault SA are among automakers weighing the local assembly of vehicles in a country where used cars make up about 70 [percent] of vehicle imports. Ghana is seeking to become a car-manufacturing hub for West Africa, a region with more than 380 million people.

The average per capita income in Ghana is a mere $2,200, making automobile ownership a luxury for many. In fact, the country has a fairly robust dealer network that specializes in fixing up old, imported vehicles, and that body has been hesitant to endorse the new rules. Many of the most affordable Ghanaian cars are vehicles that have been involved in accidents that dealers can repair and flip as cheaply as possible. The government has suggested that this is unsafe and included provisions to make the importation of any automobile that has been involved in an accident illegal — regardless of when it was built.

That’s bound to obliterate a large quadrant of the automotive market, potentially creating new troubles for low-income families in need of a car, as well as repair shops. Still, the country’s leadership claims the need for safer vehicles outweighs the financial risks and says this ultimately serves the nation by creating better-paying industrial jobs.

President Nana Akufo-Addo signed the new provisions into law on April 30th; they take effect this October. Assuming automakers play Ghana’s game, this might all turn out to be for the betterment of the nation. If not, we expect unconsidered consequences to surface pretty swiftly. Parliamentary documents pertaining to the rule already estimate the changes costing the country $143 million in customs revenue within the first three years, with fears expressed about the budget-oriented secondhand auto market.

[Image: Sura Nualpradid/Shutterstock]

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25 Comments on “Ghana Have Factories: African Nation Bans Importation of Old Cars...”

  • avatar

    Ghana is smoking crack

  • avatar

    This I have some experience with, although it has been a few years. I lived one country over to the west (Cote d’Ivoire) and made trips to Accra, Ghana. Abidjan, Cote d’Ivoire is a major port city in West Africa and one of the largest in Africa. There would be these massive cargo ships filled with “used up” Toyota Corollas, Peugeot 305s, and sometimes some Fiats. These had reached the end of their useful life and weren’t going to pass any kind of inspection in Europe. So, like a lot of first world problems…dump them on the third world. These cars would be painted the brightest orange or green you could imagine and take on another life as a clapped out taxi. Metal on metal brakes, no shocks, springs through seats…but dirt cheap to get around town or into the bush. There were many times we’d help a cab driver push start his old Corolla in the middle of the night outside a club or bar!
    Gasoline in Abidjan was around $8/gal so a lot of taxi drivers filled up with cheaper kerosene. Somehow the cars ran, but they spewed the blackest, soot-filled exhaust you could imagine. It was so bad that your snot changed color. That normally (and quickly) finished up their fuel lines, so when that Toyota or Fiat was done, pick up another one at the docks or taxi company and repeat the cycle.
    I can understand why Ghana wants to bring in some automakers to West Africa. I believe the majority of European cars with African production sites is in South Africa (I know of Nissan and BMW there.) Abidjan and Accra are very large, cosmopolitan cities with a huge workforce, expanding infrastructure, large ports, and a lot of land for factories. The roads outside of town leave a lot to be desired, but for the curious, Google Earth both Abidjan and Accra. In Abidjan, you’ll see skyscrapers, freeways, bridges that use their form of EZ-Pass, malls, wealthy Beverly Hills-like neighborhoods, along with the tin roof homes and dirt roads that comes with living in a large African city.
    I’m all for it. The large soft drink, chocolate, steel, and oil companies already have factories and massive facilities in those cities, so bring on the automakers.
    …stepping down off of the soapbox now.

    • 0 avatar

      I sold a couple of horrible clunkers to Africa years ago. Toyota Hiace vans were the main thing the buyers wanted, I think I got 2000€ for an awful rustbucket. The Afro-exports effectively eliminated the formerly ubiquitous flat-nose Hiace from the streets.

      • 0 avatar

        I can remember going to auto auctions in Los Angeles 20-odd years ago when I first moved there, and noticed that there were two people (unrelated to each other) bidding on every W123-era Mercedes and rear-drive Peugeot that would cross the block. One guy was sending the cars to Egypt, the other to West Africa. US-sourced cars were popular there because they had high equipment content and were generally well looked-after by local standards.

        (And yes, I also remember the Hiace as being a mostly-indestructible drivetrain surrounded by Swiss cheese bodywork. After three years’ service in a rainy-but-almost-snowless environment, rear wheelarches would start rotting out, followed by sills. Could never understand how Toyota didn’t work that one out.)

  • avatar
    SCE to AUX

    My daughter lived in Ghana from 2012-15. Accra is considered the “center of the Earth” because it is the city nearest 0, 0 coordinates on the globe.

    They have great potential as a mfg hub, due to political stability, geographical ease, and a skilled workforce. That low GDP needs to rise to help foster stability, however. As theflyersfan mentions, you don’t need to travel far beyond Accra to see abject poverty, and/or end up in the bush.

    Two nations away, other countries are mired in civil strife and terrorist activities, but Ghana is largely free of that nonsense.

    Kantanka is the local Ghanaian brand: “”

    • 0 avatar

      One way to promote investment is to not make laws that destroy current industries, like the ones involved in reconditioning and repairing old cars. They should be looking to the climate of property rights, free trade, low taxation and stable monetary policy that turned Hong Kong into an economic power before they wound up under the boot of socialism anyway. You can’t create a domestic market for new cars by making people poorer.

      • 0 avatar
        Arthur Dailey

        Hong Kong benefited from the rule of law, provided by stable government oversight provided by the UK.

        That made it something of an anomaly.

        When other nations attempted what you want, for example in South America and sub-Saharan Africa, the results were disastrous.

        • 0 avatar

          Part of the rule of law is that there be a legitimate process that doesn’t involve making pronouncements that annihilate existing industries. That’s a symptom of the rule of men(or people) rather than the rule of law. This is one of those things they always got wrong in the places that said they were attempting to emulate Hong Kong’s formula. You don’t need to create jobs and you can’t socially engineer. You just need to create the environment where productive people will get to reap the benefits of their efforts.

      • 0 avatar

        Free trade? China has proven that mercantilism is the way to go. Free trade American style is the path to ruin.

        • 0 avatar

          IF you’re a small or poor country, free trade is obviously beneficial. You can get things that you might not have economies of scale to produce efficiently yourself. You can sell your goods in markets where there is a larger demand at a higher price than in your own poor nation. If you’re a big consumerist nation with a state department that spends decades selling out its people, free trade is anything but free.

        • 0 avatar

          jmo2: But white collar suburban families got cheaper household goods, and that’s all that really matters in free trade.

    • 0 avatar

      I “Kantanka” these puns…

    • 0 avatar

      +2 to theflyersfan and SCE to AUX – I know two people who’ve lived in Ghana and one who went there for an extended business trip. Your comments are in line with what they’ve told me.

  • avatar

    Mexico did something similar about 15 years ago, I’m not sure its net effect, but US used car prices torpedoed.

    But then the resale value of used pickups jumped, since Mexico still allows a 15 year window for pickup imports, 10+ years old, while only allowing car/SUV/etc imports at 10 years old, and only 10 years old.

    We could easily be losing a million pickup a year to Mexico and beyond.

    • 0 avatar

      In Texas you’ll see a car towing two other cats down the road, all three usually with some body damage. Those cara are bound for Mexico. I was visiting Mexico frequently several years ago and I was asked if I could get some used cars. Ordinary people can not afford a new car and there is tremendous demand for older cars that need a little fixing up.

  • avatar

    Nicaragua has the same rule. No imports of vehicles over 10 years old.

  • avatar
    schmitt trigger

    Re; Kerosene instead of gasoline

    I have never filled up a car with kerosene, but I once did on a motorcycle, because that is all that we found.

    The engine started, as you correctly mentioned, belching clouds of black smoke. But it had virtually no power, and after a few moments it fouled up and did not start again.

    Perhaps they are mixing 50/50 gasoline and kerosene?

    • 0 avatar

      Used to be a thing in Russia in the late 80s and into the early 90s when fuel shortages became widespread. Diluted with some gas still in the tank, a bit of kerosene would get you to atleast the next city/station.

  • avatar

    This happens everywhere. Can’t pass inspection in California ? Send that car to Montana. Dirty diesels in Germany…welcome to Poland…Can’t pass Japanese inspection … a Caribbean holiday for you !

  • avatar

    Ban export of used cars from United States unless they are 25 years old or older.

  • avatar

    Remember the saying “the best is the enemy of the good”. Trying to climb out of third world poverty, obtaining any kind of motor vehicle can be a life changing, perhaps life-saving experience.

  • avatar

    If I’m not mistaken Ghana gets a lot of used JDM stuff theses days, much like Russia did in the 90s-mid 00s before likewise clamping down. At one point it was something like 75% of the male population of the Russian Far East was involved in the used Japanese car business, whether importing, reselling, repairing, parts, and major crime syndicates soon latched on as well. The business extended well into Western Siberia: guys would get a train or plane ticket and a bag of US dollars, go to Vladivostok, pick up a used car from a middle-man at the massive outdoor car market, and start the treacherous journey home on (then) dirt roads. They’d buy a full set of 4 extra wheels/tires on their way out of town and stock up on food/fuel. Minimize stops, only sleep near police outposts and well lit and populated gas stations, travel in a caravan. Road bandits would prey on these guys big time. It was a wild and crazy gold rush. Same thing happened in Western Russia running cars from Germany and the Baltics.

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