Ghana stands at a crossroads in the automotive industry, with the potential to become a leading force in Africa’s car manufacturing and innovation. While the country has made strides in local vehicle assembly, experts argue that more needs to be done to fully integrate Ghana into the continent’s growing automotive revolution. With the rise of electric vehicles (EVs) and the African Continental Free Trade Area (AfCFTA) opening new trade opportunities, Ghana has a chance to position itself as a key player. But is the country ready to take the wheel?
The current state of Ghana’s auto industry
Ghana’s automotive sector has long been dominated by second-hand vehicle imports, with many cars being over a decade old and lacking modern fuel efficiency standards. According to industry reports, over one million used vehicles enter Sub-Saharan Africa annually, while new car sales remain significantly lower. This reliance on imported vehicles has slowed the development of a strong local manufacturing base.
Martina Biene, Chairperson and Managing Director of Volkswagen Group Africa, believes that Africa’s automotive future depends on harmonized policies and trade facilitation. Speaking at the VW Africa & AAAM Meeting in Kigali, Rwanda, she emphasized the need for a continent-wide commitment to policy alignment, trade facilitation, and clean energy infrastructure. “We’ve barely scratched the surface of Africa’s potential,” she said. “For manufacturers to commit, we need a unified approach that fosters industrialization and sustainable growth.”
The Role of AfCFTA in Ghana’s automotive growth
A report by Myjoyonline indicates that the African Continental Free Trade Area (AfCFTA) presents a major opportunity for Ghana to expand its automotive industry. One of the key mechanisms within AfCFTA is the Rules of Origin (RoO), which requires vehicles to contain at least 40% local content to qualify for tariff-free trade across Africa. If properly implemented, this policy could encourage Ghana-based component manufacturing, attract global automakers, and boost intra-African exports.
Victoria Backhaus-Jerling, CEO of the African Association of Automobile Manufacturers (AAAM), has also emphasized the importance of standardization. Speaking during discussions following her appointment as CEO of AAAM on February 12, 2025, she highlighted the need for Africa to establish a unified automotive standard. “What we need is one Africa, one automotive standard,” she stated. “That’s how we unlock efficiency, reduce costs, and create a value chain that benefits everyone, from Accra to Addis Ababa.”
Moving beyond used imports
One of Ghana’s biggest challenges is its dependence on imported second-hand vehicles. While banning used cars outright is unrealistic, gradual reforms could help shift consumer demand toward locally assembled vehicles. Experts suggest that incentives such as tax reductions for locally manufactured cars and stricter emissions regulations could encourage buyers to opt for newer, more efficient models.
The future of electric vehicles in Ghana
As the global automotive industry moves toward electrification, Ghana must also prepare for the transition. Some local initiatives have already begun, with Ghanaian and Chinese companies gifting electric vehicles to former President John Mahama to promote green energy adoption. However, widespread EV adoption will require significant investment in charging infrastructure, battery production, and consumer education.
Can Ghana lead Africa’s automotive revolution?
Ghana has the potential to become a major player in Africa’s automotive industry, but success will depend on strategic policy decisions, investment in local manufacturing, and a shift in consumer behavior. With AfCFTA opening new trade opportunities and experts calling for harmonized automotive standards, Ghana has a chance to take the wheel and drive Africa’s auto revolution forward.
