The Automobile Dealers Union of Ghana (ADUG) has reiterated its threat to embark on a demonstration against government if it does not agree to amend aspects of the Customs (Amendment) Act, 2020, which bans the importation of second hand cars of more than ten years old, and salvage cars, locally referred to as ‘accident cars’.
Parliament in March this year, passed the Customs (Amendment) Bill, which the President later assented to.
Government has said the benefits largely outweigh the losses as the new amendments will boost the Ghana Automotive Manufacturing Programme which has so far attracted several car assembling plants into the country.
But in an interview with Citi Business News, General Secretary of the Automobile Dealers’ Union of Ghana, Clifford Ansu, expressed frustration over government’s decision to proceed with the amendment which will render members of the Association jobless in the short to medium term.
“We have given government a 2-week ultimatum to commit to reviewing the Customs (Amendment) Act, 2020. If they don’t listen we will hit the streets and hold massive demonstrations even as Covid-19 rages on, because if we don’t come out and demonstrate our displeasure on this matter and it continues, a lot of people are going to be affected and our businesses are going to collapse.”
Ban on importation of ‘accident’ and 10-yr old used cars starts in Oct. 2020
Government says the Customs (Amendment) Bill, 2020, which bans the importation of second hand cars of more than ten years old, as well as salvage cars, will take effect from October, this year.
The Bill, which was opposed by the Minority and vehicle dealers across the country was later passed into law by Parliament, and approved by President Akufo-Addo on April, 30 2020.
A statement issued by the government said, “the prohibition against the importation of salvage motor vehicles into the country under paragraph(b) of subsection(1) of section 58 shall come into force, six months after the date of the coming into force of this Act.”
It also stated that, “the Minister, in consultation with the Minister of Trade may, by legislative instrument, specify the date on which a motor vehicle over ten years shall not be imported into the country. The date specified under subsection (3) shall not be earlier than six months after the first vehicle has been assembled under the Ghana Automotive Manufacturing Development Programme.”
Among other issues, the statement notes that, “The date specified under subsection(1) shall not be earlier than six months after the new motor vehicles manufactured under the Ghana Automotive Manufacturing Development Programme are made available
Also, arrangements have been made for the motor vehicles to be sold in accordance with the investment plans of the automotive manufacturers and assemblers registered under the Ghana Automotive Manufacturing Development.
Background
The government as part of its transformational agenda identified Vehicle Assembly and Automotive Components Manufacturing as a strategic anchor industry that will promote economic development in the country and provide incentives for auto manufacturers.
It thus launched the Ghana Automotive Development Policy, GAMDP, in August 2019 to promote the manufacture of automobiles for both the domestic market and the West African sub-region.
A report by the Joint Committees on Finance, Trade and Industry and Tourism also noted that the Cabinet had approved the Ghana Automotive Development Policy, in which various incentives had been provided for automotive manufacturers and assemblers registered under the GAMDP.
It indicated that the committee was informed that the review in policy, as contained in the bill, would lead to an estimated revenue loss of approximately GH¢802.25 million for the first three years.
Commencement of Operations
In August 2019, Toyota and Suzuki became the latest companies to formally commit to setting up car assembling plants in Ghana.
This was after Volkswagen, Nissan and Sinotruk also major automobile companies expressed an interest in Ghana.
Volkswagen was supposed to start its operation in the first quarter of 2020, Toyota in August 2020, Suzuki before the end of 2020, Nissan in the second quarter of 2020, while discussions pertaining to the operations of Renault, Kia and Hyundai are ongoing.
