German automobile giant Volkswagen are officially going to be open an assembly plant in Ghana. On the face of it it looks a good deal after all jobs are going to be created due to this deal but there is a lot more to this.
German Chancellor, Angela Merkel with Ghana Prez Akufo-Addo in Ghana [30/08/18]Since President Nana Akufo-Addo came into office Ghana has had several high profile visitors with the latest being the German Chancellor Angela Merkel. The major talking point of her visit to Ghana though was the conclusion of the deal to bring Volkswagen to Ghana. VW coming to Ghana is an oxymoron.
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The name VW doesn’t carry as much weight as it used to following its emission scandal which officially came to light in 2015. Since then the company has been struggling with public opinion. So on the face coming to a developing country to help out with jobs is of course good press for them.
But what does it mean for Ghana? There is going to be an inflow of cash into the system as a result of this move. Thousands of jobs will be created but you can’t help but feel that VW are going to greatly benefit off us due to the Euro’s supremacy over the Cedi.
At least our people will have jobs but what does it mean for our local car industry? For years Ghanaians have had to deal with paying exorbitant fees for their cars with the duty being paid at the port almost always of a similar costing bracket to the actual amount paid for the car. So in came Kantanka Automobile.
Kantanka Automobile isn’t completely mainstream yet due to their relative newness. Ghanaians don’t completely trust them and thats understandable it’ll take time to build trust but by introducing Volkswagen directly into the system the government is going to stunt Kantanka Automobile’s growth and whiles many are saying competition brings out the best in people it probably won’t in this situation.
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Expecting Kantanka Automobile, a still-developing company, to combat a multinational company like Volkswagen is modern depiction of David versus Goliath, this time though things don’t look so rosy for David. The government ought to bring out policies that are going to ensure that local businesses grow even if foreign competition enters that market otherwise we will never move forward as a country.
Interestingly BMW and Benz are all reside in Germany so why Volkswagen? The lawsuits and fines that have been slapped with means they need to cut down cost and what better way to do that then to move to a region where your currency is over five times as powerful. As a result cheaper labour whiles maintaining a good profit margin. In the end it is the same story we are giving way more than we’ll take.