Cars to Get Cheaper as Cedi Gains Spark Hope of Price Drop in Ghana’s Automotive Market

The recent gains made by the local currency cedi against the US dollar have sparked optimism among car dealers that vehicle prices could potentially drop in the coming months.

According to industry players, the strengthening cedi could ease the cost burden for consumers, particularly those looking to purchase second-hand vehicles, which dominate Ghana’s automotive market.

The prices of these vehicles are significantly impacted by the exchange rate and port-related import duties. For years, a weakening cedi has led to higher costs for both importers and buyers.

However, with the cedi’s recent gains, dealers expect that future imports will be more affordable, leading to a potential drop in prices.

“We have something in economics called consumer behavior. The consumers when they come to the market and when they see that… when the dollar reduces, every commodity in the market reduces,” said Clifford Ansu, General Secretary of the Second Hand Car Dealers Association.

“The consumers will demand price reductions in line with the cedi’s appreciation.”

Ansu added that the sale of vehicles varies widely, with some vehicles being sold within a month or two after arriving in Ghana, while others may sit in garages for up to a year before being purchased.

This makes it difficult to immediately reflect exchange rate movements in current prices, but dealers are hopeful that the impact will become more evident in the months ahead.

“If the dollar at the time was GHȼ17 and today the dollar now is GHȼ11, look at the difference. When someone brings in their cars either today, tomorrow or next month and they come to face this [exchange rate] situation, they will definitely reduce theirs,” Ansu stated.

Industry stakeholders are also renewing calls for a review of the current import duty regime, arguing that such a move, combined with a strong currency, could help create a more favorable pricing environment for car buyers across the country.

“We want the government to peg the dollar at the ports like six months to a year so that the importer will be sure. We are praying this is not a nine-day wonder. The dollar must remain stable,” said Alexander Osei Assibey, a car dealer.