The UK Government-funded Jobs and Economic Transformation in Ghana programme (Ghana JET) has signed a memorandum of understanding (MOU) with the African Association of Automotive Manufacturers (AAAM) and the Automobile Assemblers Association of Ghana (AAAG) to accelerate the rollout of an integrated vehicle asset-based finance framework in Ghana. Signed during the first day of the IATF Automotive Forum in Algiers, this strategic collaboration will drive progress towards unlocking the potential of Ghana’s automotive industry, attracting more investment and increasing employment.
Africa is seen as the last major growth market for the global automotive industry, with the potential to produce between three to five million new vehicles annually by 2035. To achieve this ambition, car makers are expanding their manufacturing presence across the continent. In 2020, Ghana launched its Automotive Development Policy under the leadership of the Ministry of Trade, Agribusiness and Industry. Since then, thirteen global car makers (including Volkswagen, Toyota, Nissan, and KIA) in addition to a local assembler, have invested and established facilities to assemble cars locally. Despite this progress, demand for new vehicles remains low, with fewer than 30% of purchases financed through credit, largely due to high interest rates. This is a largely common trend in Sub-Saharan Africa (Fitch Solutions, 2019).
Signing the MOU on behalf of the Ghana JET programme, Team Lead – Eugene Sangmortey, expressed anticipation to be partnering with key industry stakeholders to consolidate expertise, capacity and resources to effectively execute this critical phase of the vehicle finance initiative. “I am confident this partnership will be catalytic in driving demand for ‘made in Ghana’ vehicles,” noted, Mr. Sangmortey.
“This collaboration will accelerate the delivery of affordable finance products tailored for Ghana’s automotive sector, creating jobs, attracting investment, and strengthening the country’s role in Africa’s automotive value chain,” added Jeffrey Oppong Peprah, President of AAAG. Kassem Odaymat, Vice President of AAAG, signed on behalf of AAAG.
“As the continental automotive association, AAAM fully supports this move as a lever to grow and develop Ghana’s automotive industry, in line with the continental automotive strategy”, said Martina , President of AAAM and CEO of Volkswagen Africa.
The initiative will model and pilot a Minimum Viable Product (MVP) between key actors including financial institutions, vehicle assemblers, and dealers. The MVP will serve as a proof of concept to pave the way for scaling up structured vehicle financing nationwide and potentially serve as a model for other African markets.
