By CultureBanx Team
- In 2017, Nigeria had more than 4.6 million privately owned vehicle
- Ghana’s economy expanded by 8.5% last year
German carmaker Volkswagen (VOW3.DE +1.93%) has signed memorandums of understanding to expand its business in Nigeria and Ghana. The locally assembled vehicles should hit the market in January 2019.
Why This Matters: The company plans to assemble cars in Ghana and transform Nigeria into an “automotive hub on the western coast of Africa over the long term.” Ghana President Nana Akufo-Addo stated the country will welcome investments in agriculture, finance and factories, as the economy expanded by 8.5% in 2017.
“We are well positioned. The situation on the continent has stabilized, and the economy is moving forward,” said Thomas Schaefer, Head of the Sub-Saharan region at Volkswagen. In 2017, Nigeria had more than 4.6 million privately owned vehicles in the country, according to The National Bureau of Statistics. In Ghana the assembly plant is expected to produce about 5,000 vehicle units every year with plans to increase production depending on the market demand.
It’s important to note investment in the region isn’t purely based on growth opportunities. Bloomberg reported this is part of Germany’s foreign policy agenda to strengthen development in Africa and contain illegal migration. European Union leaders have pledged to increase investments in Africa to assist development and help stem the arrival of thousands of migrants who are desperate to flee poverty.
Situational Awareness: It’s not just Nigeria and Ghana that have caught the eye of international automaker Volkswagen, Rwanda has as well along with Nissan in Kenya. Nissan (7201.T +1.16%) plans to invest at least $100 million in a light pick-up truck assembly plant in Kenya. The automakers sales in Africa increased 11.7% in Q3, totaling 70,000 units.
CBx Vibe: “Offshore” Rae Sremmurd