How Ghana cornered VW plant with new procurement policy for assembled cars
Government of Ghana may have outsmarted Nigeria in the stiff contest for the mega West African vehicles assembly plant proposed by German auto group, Volkswagen.
Investigations by Business Hilights showed that whereas Nigeria is among the four nations where the auto giant is developing new assembly plants, Ghana plant is coming with more advanced facilities and rolling development plant to change the narrative in Ghana auto industry.
Following new deal reached in August this year, Ghana and Germany signed a Memorandum of Understanding (MoU) to establish the vehicle assembly facility and to assess the feasibility of a modern Mobility Concept for Ghana.
Mr. Thomas Schaefer, Volkswagen Head of the Sub-Saharan Region and the Ghana’s Minister of Trade and Industry, Alan Kyerenmaten signed the MOU in the presence of visiting Angela Merkel, Chancellor of Germany.
Vice-President of the Republic of Ghana, Mr. Mahamudu Bawumia, was also at the ceremony. According to Volkswagen, the project would also include developing a fully-fledged sales and service network in Ghana as well as establishing a Training Academy for Production and After Sales.
Marked multiplier effects and added advantages absent in Nigeria’s deal with the company include Volkswagen’s commencement of investments in Ghana with a feasibility study for an integrated mobility solution which will include a review of the commercial viability of introducing car sharing, ride hailing and shuttle services by way of a Ghanaian subsidiary of VWSA, or the appointment of a local service provider.
According to the deal, the Ghanaian Government undertook to develop a comprehensive Automotive Industry Policy which will incentivise and facilitate vehicle manufacturing and assembly in Ghana.
This includes a preferential procurement policy for locally assembled vehicles. “We are impressed with the determination and desire of the Ghanaian Government to develop a motor industry. As the second biggest economy in West Africa, Ghana is the ideal next building block in our Sub-Saharan Africa development strategy,’’ Schaefer said.
“The realisation of the MOU should see our assembly locations increase from four to five, the other locations are in South Africa, Kenya, Rwanda and Nigeria. “Our long term commitment to this region is real and sustainable. We believe that our committed actions and delivery of the last two years are proof of this.”
Volkswagen has a fully-fledged manufacturing facility in South Africa. It also assembles vehicles in Kenya, Nigeria and most recently in Rwanda in conjunction with an Integrated Mobility Solution, offering Community Car Sharing and shortly to be launched Ride Hailing. “The first locally assembled vehicles are planned to be on the streets in Accra in early 2019,” added Schaefer.
Under its TRANSFORM 2025+ brand strategy, Volkswagen is strengthening the regions and focusing on new up-and-coming markets.
Though the Federal Government signed in September, a Memorandum of Understanding with Volkswagen Group for the production of various types of vehicles in Nigeria, work had started on the massive acres of land given out by the government of Ghana in August when it sealed the agreement with Accra.
The Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah, said at a stakeholders’ meeting in Lagos recently, that the government was willing to learn and adopt models that had worked well in other parts of the world, and make them applicable to Nigeria.
Enelamah said Nigeria remained the choice destination for investment on the continent, adding that Volkswagen made a wise investment decision by coming to establish a vehicle production plant in the country.
