Ghana’s Minister for Finance and Economic Planning presented the 2024 Budget Speech yesterday. As part of that speech, some great incentives for electric vehicles were announced. Here is the summary of the tax reliefs that have been prioritized for implementation:
This is great news. These new measures will encourage local assembly and manufacturing of electric vehicles as well as the importation of fully built electric public transport vehicles. It seems that the importation of fully built electric cars for private use has not been included on the list. It would have been great to catalyze adoption in this segment, but it’s still good progress for Ghana. Of course, encouraging more high capacity electric buses as well as electric minibuses will have a big effect on reducing emissions as well as tackling traffic congestion issues in a more sustainable manner.
Ghana now joins a growing list of countries on the African content that have reduced or removed import duties and taxes levied on electric vehicles. The list includes:
Reducing import duties and taxes can be a huge catalyst in the quest to accelerate the adoption. We have seen just how significant this can be with the surge of imports of EVs in Ethiopia after taxes were reduced last year.
I hope these measures will help Ghana’s electric mobility sector to get to the next level. There are already some exciting startups working hard to grow Ghana’s electric mobility sector. These include SolarTaxi, Kofa, and Wahu Mobility. These kinds of firms now need more investment to really scale to the next level now that the Ghanaian government has introduced some incentives.
The removal/reduction of import duties and taxes helps make EVs more competitive with equivalent ICE vehicles. Although EVs generally had competitive advantage when you factor in the total cost of ownership, the higher upfront costs tend to intimidate the average consumer. Stuff like TCO analysis is great for fleet managers who are used to crunching these kinds of numbers, but for the average consumer, the sticker price is still a major factor. The reduction of import duties will also go a long way in encouraging more consumers to opt for brand new electric vehicles, displacing some of the used ICE vehicle imports.
Ghana drives on the same side as China, meaning that Ghanaians can get a good selection of EVs across most vehicle segments from China as well. On the other hand, increasing local assembly of electric vehicles will go a long way in creating much needed employment opportunities, as well as supporting import substitution programs.
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