Ben Boakye to Gov’t: Fix lazy approach to mass transport and leave cars for people who want luxury

The Executive Director of Africa Center for Energy Policy (ACEP), Ben Boakye, has waded into the ongoing debate on government’s intention to ban the importation of overage and salvage cars.

ACEP Ben Boakye ban on salvage cars
Ben Boakye, Executive Director, ACEP

Majority Leader of Parliament, Osei Kyei Mensah Bonsu recently announced a proposal to introduce a bill that will ban the importation of these vehicles as part of measures to reduce roads accidents.

The policy is also expected to boost the country’s drive to create an automobile industry that would produce quality but affordable cars and create additional employment for Ghanaians.

But the head of ACEP believes that many of the problems calling for the new policy could be fixed if government develops effective mass transportation systems.

A statement authored by Mr Boakye indicates that, issues the new policy seeks to address are not the variables that determine the road worthiness of a vehicle and that the arguments being advanced are saddled with inaccuracies.

Roadworthiness cannot be an exclusive function of when a car was manufactured. Depreciation of a car is, all thing being [equal], a direct function of its use and maintenance. It cannot be principled for a ten year old car with 20k miles to be seen as obsolete whiles the system accepts nine year old car with 100k miles.

According to Mr Boakye, government’s plan to make cars cheaper and affordable to Ghanaians may well not be met since the cost of locally assembled vehicles may drive people to rebuild and use salvage cars.

The point also has to be made that many people will opt for a new car if their pockets can support it. The reason why many people try to rebuild salvage cars is cost and the difference between salvage cars and new cars is not marginal to assume that Ghanaians will be empowered overnight to be capable to afford new cars.

The statement further adds that, the new policy may in the end kill the businesses of thousands of artisans who would normally be employed to refix salvage cars, since people would have no choice but to rebuild such cars in their countries of origin before importing them.

So if Ghana implements a policy that bars importation of cars without clean title, the effect of that policy will only ensure that salvage cars are rebuilt outside the country before they come in, not to stop the importation of cars that were once declared salvage. Again more $s will be required to be spent in foreign economies to fix the cars before they come to Ghana. This will automatically render thousands of the Ghanaian artisans who have specialized in the art of fixing those cars out of business.

Read below Ben Boakye’s statement on the proposed ban on salvage vehicles….

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So I’ve been monitoring this conversation about banning some used cars and salvage cars. Two arguments are emerging from the sponsors of the bill: to ensure that road worthy cars are imported into the country and to provide incentives for local manufacturing/assembling of cars.

My nightmares with this policy are as follows;

1. Roadworthiness cannot be an exclusive function of when a car was manufactured. Depreciation of a car is, all thing being, a direct function of its use and maintenance. It cannot be principled for a ten year old car with 20k miles to be seen as obsolete whiles the system accepts nine year old car with 100k miles. In advanced countries, new cars are often declared not road worthy because of manufacturing defects and recalls are made. The question for the sponsors of the bill is this, can the DVLA ascertain today the roadworthiness of all the cars that come into this country, whether new or old ? There is more room for DVLA to improve on ensuring that either used or new a car on the road qualifies within reasonable standards of measure.

2. In many jurisdictions salvage cars are allowed to come back to the road provided they can be rebuilt to Standard and recertified as roadworthy-Check most of the countries where salvage cars are imported into Ghana, including USA. So if Ghana implements a policy that bars importation of cars without clean title, the effect of that policy will only ensure that salvage cars are rebuilt outside the country before they come in, not to stop the importation of cars that were once declared salvage. Again more $s will be required to be spent in foreign economies to fix the cars before they come to Ghana. This will automatically render thousands of the Ghanaian artisans who have specialized in the art of fixing those cars out of business. To make the argument that salvage cars are not roadworthy is to admit in effect that DVLA is not useful for the function it is assigned.

3. Government argues that it wants to make new cars cheaper for the Ghanaian to afford through local assembling. However the economic argument of this assumption has not been exhaustive. What kind of assembling is Ghana hoping the investors will do in the country? What is the size of the market to justify real assembling (not some garage to fit doors and lights on a car to avoid paying taxes) of cars in Ghana. We have seen this model and promise of car assembling plants in many African countries by car manufacturing companies, yet policy makers are not connecting the dots to understand the incentives and strategy of the car manufacturers in Africa’s market. The point also has to be made that many people will opt for a new car if their pockets can support it. The reason why many people try to rebuild salvage cars is cost and the difference between salvage cars and new cars is not marginal to assume that Ghanaians will be empowered overnight to be capable to afford new cars.

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My understanding of this policy is that more money will be lost to the economy of Ghana. Car manufacturers will have incentive of reduced tax for those who can afford it and are suppose to pay the right taxes. Many Ghanaian will remain in the used cars segment with an adjusted contribution to other economies to fix salvage cars. Many jobs for artisans will inevitably be lost to foreign economies.

What we need is a functional DVLA to ensure that cars are roadworthy irrespective of their age. It’s still possible today to get a roadworthy certificate without sending the car for inspection in this country. Don’t jump this flaw into wishful policies that further disempower Ghanaians. The number of workers that will be required in an assembly plant should be part of the conversation to allow the country to analyze the economics of the policy if the job creation angle is to be sustained.

Government should fix the lazy approach to mass transportation and leave cars for people who want extra luxury or really need them, not because they just want to move from one point to the other.

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