Govt to redefine ‘salvaged’ cars as law banning imports kicks in Nov 1

The Minister of Trade, Alan Kyerematen, says the government will redefine what salvaged cars mean in banning the import of used vehicles into Ghana.

According to him, there were vehicles described as salvage in the United States that could still be useful in Ghana.

For instance, he explained, in the US even if a taillight of a car scratches, insurance companies would declare it as a salvaged car, meanwhile that car could be legal on Ghana’s roads.

With the National Democratic Congress promising to abolish the law that bars the importation of salvaged cars while garage owners and spare part dealers complain about the potential threat to their business, the government is rethinking its operational definitions.

At the NDC manifesto launch on September 7, the party’s flagbearer, John Dramani Mahama, said  “We will review the customs amendment act, 2020, Act 1014 to scrap the law banning the importation of salvaged vehicles, and the proposed imposition of 25% import duty rates.

“We are going to scrap it in order that salvaged vehicles are not banned and the top duty that the government proposes to impose on these vehicles does not happen.

“This is to save the local automotive industry so that our people in Suame Magazine, Kokompe, Abossey Okai to continue to work to earn a decent living,” Mr Mahama said.

But Mr Kyerematen told Wontumi TV that “there is no need to entertain any fear because Ghana will not adopt the US definition of salvaged cars.

“In the US, even if the tail light of car scratches a bit, the Insurance companies will declare it as salvaged, but that is not what we will use in Ghana,” he clarified.

A U-turn? 

Meanwhile, the co-chair of the Abossey Okai Spare Parts Dealers Association, Clement Boateng, has hinted that the government intended to suspend the law on the ban of importation of salvaged vehicles.

Mr Boateng told Happy FM that the government had met used car and spare parts dealers to assure them that Ghanaians had the liberty to deal in the importation of salvaged and overaged vehicles.

Incentives for auto assembly plants

The government this year amended the Customs Act, 2015 (ACR 891) to provide incentives for automotive manufacturers and assemblers under the Ghana Automotive Manufacturing Development Programme, prohibit the importation of salvaged motor vehicles and specific vehicles over ten years old into the country.

It will prohibit the importation of salvaged motor vehicles comprising wrecked, destroyed, or physically damaged by collision, fire, water or other occurrences and specified motor vehicles of over 10 years into the country.

The law is also expected to increase the import duty on specific motor vehicles and provide import duty exemptions for the security agencies and officers of the security agencies, especially those who go on various assignments and peacekeeping in the security interest of Ghana.

The government is counting on the Ghana Automotive Manufacturing Development Programme to develop and grow a vibrant auto industry in Ghana.

It has signed memoranda of understanding (MoU) with auto giants including Toyota, Nissan and Volkswagen.

The MoUs with the auto giants followed the government’s announcement of the Ghana Automotive Manufacturing Development Programme (GAMDP), which the Nana Akufo-Addo administration hopes will, among other things, generate high-quality skilled jobs in manufacturing, offer an import substitution and export promotion to improve the balance of payment.

Apart from safeguarding the environment, the policy is also expected to improve road safety in the country and guarantee higher asset value for vehicle buyers, financier, insurers, and transform the quality and safety of the national road transport fleet.

President Akufo-Addo on August 3 unveiled the first fruit of Ghana’s auto policy as VW Ghana opened its vehicle assembly plant in Ghana.

But there is an opposition to the policy with the Coalition of Car and Spare Parts Dealers within Tema, Spintex, and Ashaiman kicking against the policy.

By amending the act, Ghana traded off more than GHc 800 million it got from vehicles import duties, according to figures from Parliament.