Mr Speaker, thank you.
The third point raised by Hon Fuseini refers to the potential loss of jobs. My understanding, by logical implication, is that he is referring to loss of jobs arising from the used- vehicle dealership businesses. I would like to suggest to the Hon Member that if this policy is to promote the assembling and manufacture of vehicles, has he considered the jobs that would be created arising from the fact that there would be assembling and manufacturing of vehicles?
Secondly, I would like to reinforce this point that the issue of loss of jobs from the used vehicle dealers does not arise because they would still deal with used vehicles that are brought into this country and are less than 10 years of age. Also, the new vehicles that would be assembled and manufac- tured would also become potential
candidates for the dealership community. So I am trying to understand how the Hon Member arrived at the calculation in the loss of jobs.
Mr Speaker, last but not least, he talks about the loss of tax revenue, but I think another Hon Member has already addressed that. Mr Speaker, Hon Kpodo also seemed to suggest that this amendment Bill must be put aside only because we have not yet considered the support that must go to existing local assembling companies.
However, I would like to correct this impression because it is not founded and not based on evidence and I want to suggest to the Hon Member that already, the Kantanka Group and Neoplan Ghana Limited have been engaged in extensive discussions with the Ministry as to how they can participate in this programme. In fact, one of the likely beneficiaries of this policy is the Kantanka Group and so I would want to correct that impression.
Mr Speaker, he also made reference to Fully Built Units (FBUs). Anywhere that there is a thriving automotive industry, they allow the importation of Fully Built Units (FBUS) for two things; because there is the need to be able to extend the range of models of vehicles that are provided by the assemblers and
manufacturers. By giving them these incentives of bringing in FBUs, it complements that model and range that is offered to the country.
Secondly, I would want the Hon Member to remember that when FBUs are brought in with the benefit of no taxes, obviously, it becomes more affordable than they would have otherwise been the case so what are we suggesting? Are the FBUs coming in at a higher cost when it is part of the incentive framework for them to come in without payment of duties? So obviously, we are making it less expensive for those who would like models other than the ones that would be produced here.
Mr Speaker, also Hon Agbodza made reference to the FBUs and I would like to suggest to him to find time and read the policy document. Mr Speaker, he would find that the beneficiaries of the incentive to bring in the FBUs can only activate that incentive on the basis of what they produce. So there is a factor ratio between what has been assembled and what was brought in as FBUs. So it is not a situation where a company is registered as an assembler and then instead of assembling locally they bring in FBUs.
Mr Speaker, this is not the case and there is a factor that addresses this.
Also, Hon Agbodza made reference to purchasing power that if a Ghanaian has the capacity to buy a new vehicle then he would not buy a used vehicle. Mr Speaker, this is one of the main reasons for us to develop the local assembling and manufacturing industry. We are saying that if Ghanaians have the opportunity to afford new vehicles then that would be their preference.
Mr Speaker, when we read the Automotive Policy, there is a comprehensive programme for vehicle financing that supports the establishment of this industry. Anywhere in the world that this industry has succeeded, it comes with a number of things that makes it possible for it to be accessible to ordinary people. So the vehicle financing scheme would deal with the issue that has been raised.
Mr Speaker, just to provide a context before I conclude, every year Ghana imports over 100,000 vehicles; and 10,000 of these are new vehicles and 90,000 are used vehicles. This amounts to an import bill of US$1.14 billion which represents 12 per cent of our import bill. Mr Speaker, this is the leading single item of imports in
Ghana if you look at our freight statistics. Now, as a government that seeks to enhance industrial transformation based on a parallel strategy of export enhancement and import substitution, there could be no better testimony in implementing this policy than to be able to reduce the import of vehicles by producing substitutes locally. Why would we want to industrialise and at the same time create jobs for the auto industries in other countries?
Mr Speaker, beyond this, it is not by accident that all the leading economies in the world are also the leading countries that have automotive industries as one of their strategic anchor industries.
Mr Speaker, this is not by accident and if we interrogate countries that have been able to resist all the pressures that arose from the financial meltdown, we would see that those that survived were the ones who had strong auto industries.
So as a country, we have taken a decision that this is one of the new strategic anchor industries that we would develop and there are many benefits that would come along with it. Firstly, as Hon Agbodza referred to, it would bring in FDI and that is fair. Secondly, it would create diverse economic leakages. The auto industry
is one of the most vertically integrated industries globally.
Every car has over 2,000 parts, and the production of component parts that go into one vehicle is an opportunity for the development of small and medium enterprises. This is a very important point.
Secondly, it goes beyond the production of parts. The downstream industry, financing, warehousing, insurance and automotive parts are all allied industries that come with the development of the industry including car rentals.
The third one is the training in part manufacturing and engineering skills. Also, we need to understand the implications on the health and safety of our people. That is one of the major reasons you would seek to renew and modernise your fleet. This is because every year, over 2,000 deaths and over 10,000 injuries occur partially as a result of the nature of vehicles that we bring into this country.
It would also improve the asset value of vehicle owners, once we have a renewal of fleet. Last but not least, we are also safeguarding the natural environment because all cars
naturally would have higher level of emissions.
So if we have the opportunity to have an extensive discussion on this, you would realise that the cost-benefit analysis clearly supports the introduction of this.
Mr Speaker, everywhere that we have a thriving automotive industry, these benefits and incentives are offered to be able to attract investors. This is why we are talking about the restrictions on used cars that are over age. That is why we are talking about the banning of salvaged vehicles and other incentives that are provided.
Mr Speaker, in bringing my remarks to a conclusion, I would like to inform this august House that we have had extensive consultations and discussions with the industry, starting from 2019 when we started putting together this policy and it is not only in Accra, we have travelled all over the country together with the industry players who are used vehicle dealers leading this consultation exercise. How come then do we all of a sudden come to a situation where we seemed to be suggesting that nobody knows about this policy? That consultation has gone on extensively.