AAAG chief calls for urgent action on automotive component policy

…says country’s bid to become regional parts hub at risk amid policy delays

By Ernest Bako WUBONTO

President-Automobile Assemblers Association of Ghana (AAAG) and Chief Executive Officer (CEO)-Volkswagen Ghana, Jeffrey Oppong Peprah, has underscored the critical importance of automotive component manufacturing as the sector’s transformative pillar, urging swift government action to position Ghana as a regional hub for parts production.

Speaking as a panellist at the Intra-African Trade Fair (IATF), Mr. Peprah stated that component manufacturing offers greater economic value than vehicle assembly alone, with the potential to generate up to seven times more jobs. He noted that the sub-sector – which includes production of essential components such as engine parts, batteries, lighting systems, electronics, interior fittings and underbody structures – is the true powerhouse of the automotive industry.

He stressed that the automotive industry’s success in Ghana hinges not only on assembling vehicles but also building a robust local supply chain. “Component manufacturing is the game-changer. It is where real industrialisation happens,” he remarked.

The AAAG, in collaboration with the Ministry of Trade, Agribusiness and Industry (formerly Ministry of Trade and Industry) and other key stakeholders, has already developed a draft Automotive Component Manufacturing Policy. However, the policy is yet to be passed – raising concerns about delays that could dampen investor interest and cost Ghana its competitive edge.

Several Original Equipment Manufacturers (OEMs), according to Mr Peprah, have expressed keen interest in Ghana’s component sector and are awaiting policy clarity to drive investment decisions. “Côte d’Ivoire is actively engaging some of these OEMs. Any further delay on Ghana’s part could shift the momentum in their favour,” he warned.

During the panel discussion themed ‘Leveraging AfCFTA and Afreximbank tools to drive Ghana’s intra-african trade and investment’, Mr. Peprah also disclosed that the automotive industry is in advanced talks with the African Export-Import Bank (Afreximbank) to secure financing support for the local market. He explained that this funding could lower vehicle prices and increase access to locally assembled vehicles through mortgage-like financing options for consumers.

Policy crucial to industrial strategy

The Automotive Component Manufacturing Policy currently under Cabinet consideration is a central plank in the country’s industrial strategy. Designed to attract investment, create jobs and integrate local firms into regional and global automotive value chains, the policy sets out a framework of rules and incentives to stimulate production of parts and components within the country.

According to Mr. Peprah, the policy’s passage would pave the way for Volkswagen’s global component partners to establish local operations – serving not only Ghana but also the wider Economic Community of West African States (ECOWAS) region.

“With the capacity of our partners and level of investment available, Ghana has a genuine opportunity to become a strong component manufacturing base exporting to the sub-region and beyond,” he stated.

He added that as regional competition heats up, there is need for immediate action to unlock the sector’s potential and secure Ghana’s position as a strategic automotive hub under the African Continental Free Trade Area (AfCFTA).

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