The sharp increase in vehicle prices in Ghana has become a major concern for both consumers and car dealers alike.
Over the past year, the cost of purchasing a vehicle, whether new or used, has risen steeply, leaving many Ghanaians frustrated and dealers grappling with slower sales and shrinking profits.
Several car dealers in Accra say the problem is multi-faceted, ranging from the volatile exchange rate to high import duties and the effects of global inflation.
Dollarisation
A car dealer based at Abossey Okai, Kwame Sarpong, did not mince words when asked what the biggest challenge was.
According to Mr Sarpong, most of the cars on the market are imported from the United States, Japan, and Europe.
With the Ghanaian cedi steadily depreciating against major foreign currencies, car dealers are forced to pass the increased cost onto buyers.
“Everything we do is in dollars, buying the cars, paying freight, and clearing them at the port.
The dollar keeps going up, but our cedi is always falling. It’s killing our business. A car I bought for GHc 65,000 last year is now over GH₵170,000. The customer sees the price and walks away.”
Import duties
Emmanuel Oduro, who has been in the business for over a decade in Lapaz, said it is not just about exchange rates.
He believes the government’s tax structure is making the situation worse.
He suggests that the government needs to review its vehicle import policies, particularly the duty regime for used cars.
“The import duties are ridiculous. You pay duty on everything the car, the engine size, the year of manufacture, even the weight. It makes no sense. A car we bought for $6,000 can end up costing GH₵100,000 by the time it hits the showroom,” he said.
Customs processes
Meanwhile, Yaw Boadu, another dealer who operates around Spintex Road, blames inefficiencies and inconsistencies at the country’s ports for compounding the problem.
He called for more transparent customs processes and standardised valuation procedures.
“Sometimes, you do not even know how much you are going to pay until the car arrives. The valuation officers can give two different figures for the same car on different days. That unpredictability affects our pricing, and at the end of the day, the customer pays for it,” he said
Expert opinion
An import-export expert and Executive Secretary of the Importers and Exporters Association of Samson Asaaki Awingobit, added a broader economic perspective to the issue.
According to him, the vehicle pricing problem is part of a larger economic challenge facing Ghana.
“Vehicle prices are a reflection of our trade imbalances and overdependence on imports. As long as the cedi continues to weaken and we rely on imported goods without equivalent exports, we will continue to feel the pressure. The government must invest in industrialisation and create incentives for local assembly plants to thrive,” he said.
He also recommended targeted subsidies or tax relief for essential imports, including certain categories of vehicles, especially those used for public transport or commercial services.
Scrapped taxes
Industry stakeholders say urgent action is needed to prevent the situation from worsening.
Many warn that if the trend continues, the vehicle market could face a major downturn, leading to job losses and reduced government revenue from import taxes.
Government officials have acknowledged the rising cost of imports but say broader economic reforms are underway.
President John Dramani Mahama, in his 2024 campaign manifesto, pledged to scrap import duties on vehicles and equipment imported for industrial and agricultural purposes within his first 100 days in office.
While this promise was reiterated in the 2025 budget presented by the finance minister, Dr Cassiel Ato Forson, the actual implementation details, including the specific categories of vehicles and equipment that would qualify, are still being deliberated.
Auto dealers and business groups have been advocating for a comprehensive review and reduction of the numerous taxes and fees associated with vehicle imports.
Currently, importers face over twenty different charges when clearing vehicles at Ghanaian ports, including import duty, VAT, National Health Insurance Levy, GETFund Levy and others.
While there have been targeted efforts to reduce import duties on specific vehicle categories, such as electric vehicles for public transport and vehicles for industrial and agricultural use, a complete abolition of import duties on all cars has not been realised.
Stakeholders continue to engage with the government to advocate for broader reforms aimed at reducing the financial burden on vehicle importers and promoting economic growth.
Source: Graphiconline