Ghana bans importation of used cars older than 10 years to force automakers to set up local plants in the West African country.
The law also bans the importation of cars which have been involved in accidents.
The restrictions will cost government $143 million (₦55.4 billion) in customs revenue in the first three years, in a country where used cars make up about 70% of vehicle imports.
Ghana has banned the importation of cars older than 10 years to encourage automakers like Volkswagen AG and Nissan Motor Co. to set up local plants in the West African country.
According to the act of parliament obtained on Thursday by Bloomberg, the new law also provides import-duty rebates for companies that manufacture or assemble cars in Ghana.
The embargo will take effect six months after the manufacturing or assembling of new vehicles in Ghana begin under a special government program meant to draw investment.
Ghana, a country where used cars make up about 70% of vehicle imports, is seeking to become a car-manufacturing hub for West Africa.
Volkswagen, Nissan, Toyota Motor Corp., Suzuki Motor Corp. and Renault SA are some of automakers planning to setup local car assembly plants in a country with more than 380 million people.
According to parliamentary documents, the import restrictions could cost the government as much as $143 million in customs revenue in the first three years after implementation.
Used-car sellers offer more affordable deals in a country where auto loans are rare.
The law, signed by President Nana Akufo-Addo on April 30, also bans the importation of cars which have been involved in accidents. Car dealers bring in these cars to repair so as to provide even cheaper options to consumers.
The ban on these cars will take effect from October, regardless of their date of manufacture.
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