Trained for the future : Volkswagen and Toyota preparing the automotive industry in Ghana.
Date: 2024-04-03
Institutions: European University Institute
Subjects: Ghana, brain drain, industrial infrastructure, investment, job creation, location of industry, motor vehicle industry, skilled worker, vocational training

Trained for the future:  
Volkswagen and Toyota preparing 
the automotive Industry in Ghana

On  28  June  2021,  a  ceremony  celebrating  the  unveiling  of  the  first 
Toyota car assembled in Ghana took place. The President of Ghana, 
Nana Akufo-Addo,  arrived  in  his  official  car  with  the  Ghanaian  flag. 
Ghanaian  kente-clad  musicians  and  dancers  provided  the  outdoor 
ambiance at the entrance to the new plant. The President and his two 
bodyguards and other Ghanaian ministers were all dressed in shirts 
with African print. In an area in the large fully equipped and sparkling 
clean assembly hall, about 200 chairs had been placed with the pre-
scribed distance of 1.5 m between them because of the coronavirus. 
Ghanaian  and  Japanese  businesspeople  in  suits  and  ties  occupied 
most of the seats. Among them were also workers at the plant, who 
were all wearing identical t-shirts with the Toyota logo. The air in the 
plant was air conditioned. The president of Ghana held a 10-minute 
speech congratulating Ghana and Toyota. 

Less than a year earlier on 9 August 2020, Volkswagen had opened 
an 8 million USD Vehicle Assembly Plant in the same free zone. In 
both cases, the Ghanaian media quoted Ghanaian ministers empha-
sising  the  creation  of  jobs  for  Ghanaians  and  adding  “that  it  would 
further reduce the use of foreign exchange to import second-hand ve-
hicles and at the same time promote exports of Made in Ghana cars to 
other African markets, which would in turn earn Ghana much-needed 
foreign exchange.” The Ghanaian media focused on the importance 
of the factories for Ghana. 

Author
Annette Skovsted Hansen, Aarhus University;

Issue 2024/07
February 2024

POLICY BRIEFThis  policy  brief  explains  why  Japanese,  German 
and many other car companies have chosen Gha-
na.  It  concludes  by  recommending  future  actions 
for human resource development and infrastructure 
efficiency and reliability to ensure expansion of lo-
cal production and job creation in the Global South.

So  why  choose  Ghana?  Ghanaians  already  held 
Toyota  cars  in  high  esteem,  but  until  this  point  in 
time  the  cars  had  all  been  imported  new  or  sec-
ond-hand. Ministers, other dignitaries and business 
moguls took pride in their new Toyota cars arriving 
on ro-ro vessels in the Port of Tema. Therefore, not 
surprisingly a photo of the proudly smiling President 
of  Ghana  and  the  Ghanaian  flag  framed  the  invi-
tation  to  the  commissioning  of  the  finished Toyota 
Vehicle Assembly  Plant  with  an  illustration  of  two 
Toyota car models.

The announcement of the plan to build the Toyota 
assembly plant came at the 7th Tokyo International 
Conference for African Development held in Yoko-
hama on 28-30 August 2019, a few months after the 
completion and opening of the first stage of Termi-
nal 3 at the Port of Tema at the end of June 2019. 
Meridian Port Services (MPS) manage the terminal. 
MPS was a collaboration between the Ghana Port 
and Harbour Authority (GPHA), the French compa-
ny  Bolloré  and  Danish APM  Terminals  from  2004 
to 2022, when MSC replaced Bolloré. The new ter-
minal  ensures  the  efficient  and  safe  arrival  of  the 
necessary parts and potential exports of locally as-
sembled vehicles to other countries. 

Many  foreign  investors  are  seeking African  coun-
tries  in  which  to  invest  and  Ghana  is  a  politically 
stable emerging economy. Because of the expect-
ed  and  existing  markets,  Toyota  and  Volkswagen 
are not the only plants planned. The new scramble 
for Africa involves not only European countries but 
also  many  other  countries  including  South  Korea, 
India  and  Turkey,  to  mention  a  few.  Hyundai,  KIA 
and many others have made agreements for future 
assembly plants. 

The  main  challenge  for African  countries  is  to  en-
sure that the new scramble for Africa truly benefits 
people living in African countries. So far, the scram-
ble seems to have primarily benefitted other conti-
nents scrambling to have access to raw materials, 
to corner markets and to ensure influence in Africa. 

They expect the African continent to offer raw ma-
terials and resources as in the past, and soon also 
the largest populations of consumers. 

The first scramble for Africa, 1885

The  first  scramble  for Africa  came  at  the  tail  end 
of the triangular trade in slaves and sugar between 
the four continents of Europe, Africa and the Ameri-
cas. In 1885, the European powers of Austria-Hun-
gary,  Belgium,  Denmark,  France,  Germany,  Italy, 
the  Netherlands,  Norway,  the  Ottoman  Empire, 
Russia, Sweden, the United Kingdom, Portugal and 
the United States met in Berlin and divided the con-
tinent of Africa with a ruler on a map. This explains 
the  very  straight  lines  of  the  borders  between  the 
54 African countries that exist today and the other-
wise inexplicably illogical divisions of topographical 
features and ethnic groups. This scramble was first 
and foremost to divide access to minerals, precious 
stones and cash crops for use and sale in Europe, 
the United States, Canada and various Asian coun-
tries,  where  people  with  purchasing  power  lived. 
The  skilled  working  class  employed  to  refine  and 
produce products from the raw materials also lived 
beyond the African continent.

The post-WWII scramble for Africa

After  1945,  the  main  perpetrators  of  WWII,  Allies 
and Axis  powers  alike,  divided  themselves  in  two 
blocks,  the  communists  and  the  capitalists,  and 
vied for influence on the African continent. One of 
the most powerful  tools was multilateral  and bilat-
eral official development assistance (ODA) offered 
in  the  name  of  alleviating  poverty.  Initially  from 
1948 the United Nations Technical Assistance Pro-
gramme  (UNTAP)  distributed  technical  assistance 
and  capital  in  various  forms.  However,  from  1961 
bilateral  programmes  claimed  the  votes  of  the  in-
creasing  number  of  independent African  countries 
that  joined  the  United  Nations  (UN). All  the  newly 
independent  countries  admitted  as  UN  members 
gained one vote each in the General Assembly, on 
a  par  with  all  their  former  colonisers.  This  meant 
that the so-called East and West Blocks of the Cold 
War needed their votes to assert their power in the 
United  Nations.  Many African  governments  joined 
the  Non-Aligned  Movement  established  in  1961 

2  

  Robert Schuman Centre | February 2024

by African, Asian and Central and South American 
leaders  and  Tito  from  Former  Yugoslavia  for  the 
purpose of asserting their intention to manage the 
donors of ODA.

and living in African countries, while the leadership 
and  upper  classes  insisted  on  purchasing  luxury 
items  imported  from  the  Global  North  –  or  China 
and India.

Managing ODA donors

Many multilateral organisations such as the UN and 
non-governmental  organisations,  and  individual 
countries offered monetary, technical and capacity 
development assistance to individual governments, 
leaders  and  the  peoples  of African  countries.  Ca-
pable governments could manage the many multi-
lateral and bilateral donors by selecting those who 
offered the best deals for their peoples and them-
selves. Especially training, fellowships and scholar-
ships were in high demand because they promised 
long-term effects and future influence. Many donors 
offered  various  forms  of  training,  fellowships  and 
scholarships with clauses limiting brain drain.

Overseas studies and the fear of 
brain drain

Brain  drain,  or  the  potential  for Africans  educated 
overseas to qualify for and accept jobs abroad and 
not in their home countries, grew as students from 
many different African countries received university 
degrees, vocational training and continuing educa-
tion  abroad.  Brain  circulation  based  on  temporary 
professional experience abroad coupled with remit-
tances in the form of monetary earnings, knowledge 
and  ideas  often  benefitted  the  home  countries. 
However,  if  too  many  well-educated  people  left  – 
especially those who had received their initial edu-
cation and training at home – they depleted the lo-
cal skilled workforce. Besides higher salaries, more 
luxurious lifestyles and more positively challenging 
work conditions and academic environments, peo-
ple educated abroad started families and settled. 

The current scramble for Africa

The current scramble for Africa began in earnest in 
the post-Cold War period, when a larger workforce 
and a growing middle class with increased purchas-
ing  power  supplemented  the  continued  interest  in 
natural  resources  and  cash  crops.  However,  pat-
terns of exports of unprocessed crops and resourc-
es persisted and curbed the gain for people staying 

Creating opportunities for skilled 
workers and professionals to stay in 
their home countries

The push to create jobs in African countries for an 
educated  and  skilled  workforce  is  part  of  the  sus-
tainable development goals (SDG) to be achieved 
by 2030. The UN members negotiated and decided 
on 17 SDGs as a follow-up to the Millennium Devel-
opment Goals (MDGs) set to be achieved by 2015. 
SDG  8  (the  creation  of  jobs)  is  essential  to  avoid 
brain drain – and to create an industrial or produc-
tion  foundation  for  the  economies  of  countries  on 
the African continent. Industrial and entrepreneurial 
endeavours could be promoted by the local elite and 
wealth, which would ensure relevance, indigenous 
embeddedness  and  profit  staying  in  the  country. 
However, this requires indigenous efforts to include 
local funding and management of foreign direct in-
vestment (FDI) to enable local beneficiaries.

Ghana attracting FDI by becoming an 
emerging economy

Many  companies  hesitate  to  invest  in  the  African 
continent  due  to  bad  ratings  on  the  Ease  of  Busi-
ness  Index,  because  of  political  instability,  poor 
digital and physical infrastructure, corruption and a 
lack  of  safe  and  stable  sources  of  electricity  and 
other power essential for production, laboratory ef-
fectiveness  and  more.  Ghana  is  one  of  the  most 
stable  and  highly  ranked African  countries  on  the 
Ease of Business Index and was categorised as an 
emerging economy among the sub-Saharan coun-
tries besides South Africa. Therefore, many former 
ODA  donors  are  now  heavily  involved  in  Ghana 
with FDI and live up to the understanding that the 
goal of ODA should be to attract FDI. 

Foreign direct investment in the  
automotive industry

In spite of plenty of good reasons for creating jobs 
and  investing  in  industrial  development  in  Ghana, 
many companies hesitate. So why did VW and Toy-

3  

  Trained for the future: Volkswagen and Toyota preparing the automotive

along the West African coast and their connection 
to  Ghana.  Furthermore,  the  two  assembly  plants 
prove the potential of Terminal 3 also as a gateway 
to  Ghana  and  the  neighbouring  landlocked  coun-
tries by creating jobs, industry and related services 
inland, and thereby not only benefitting the interna-
tional shipping lines.

Policy implications

As  long  as  the  international  shipping  companies 
based in the Global North set the agenda, port ex-
pansions  will  remain  focused  on  the  benefits  as 
hubs.  The  aim  of  the  expansions  and  FDI  will  be 
to  encourage  transshipments  through  free  zones. 
The  port  as  a  gateway  to  the  country  of  the  port 
or  landlocked  countries  serviced  by  the  port  will 
typically  not  be  a  priority.  This  limits  the  benefits 
for  local  labour,  revenue  for  education  and  health 
care in the country, and local production. However, 
the  long-term  planning  of  the  two  assembly  plant 
host companies, Toyota and Volkswagen, warrant a 
slightly  more  beneficial  approach  to  strengthening 
local communities and production.

Recommendations

1.  Make long-term plans for human resource de-
velopment  in  sectors  and  professions  needed 
in a country.

2.  Support the construction of infrastructure hubs 
and  gateways  in  ways  that  allow  local  com-
munities,  foreign  direct  investment  and  local 
wealth to find common interests.

3.  Create jobs in production in Tema and well-fund-
ed  research  institutes  and  training  centres  to 
avoid brain drain.

ota open assembly plants in Ghana as first movers? 
Whereas the physical structure and concrete logis-
tics potential is the same for all potential investors, 
there is a second reason: the existence of a Gha-
naian workforce trained by automobile manufactur-
ers in Japan. They have been trained in automotive 
quality  and  maintenance  skills  since  1959.  Many 
of them were trained on the job in Toyota factories 
in  Japan  –  initially  as  mechanics  to  repair  second 
hand Toyota vehicles imported to Ghana.

Long-term planning

From  1959,  Toyota  together  with  the  Association 
of Overseas Technical Scholarships (AOTS) partly 
funded  by  Official  Development  Assistance  invit-
ed  Ghanaians  to  join  technical  and  management 
courses  in  Japan  and  in  India  to  learn  about  the 
quality, auto mechanical and technical expectations 
of Toyota. The many Ghanaians who have attended 
these courses over the past 65 years have a clear 
understanding of Toyota’s philosophy and practice 
and the Toyota management in Japan is, therefore, 
sure that Ghanaians can run the assembly plant re-
sponsibly. Initially, the trainees trained as auto me-
chanics, who could service and repair second hand 
Toyota – and other – cars imported to Ghana. How-
ever,  the  assembly  plant  requires  more  advanced 
training  and  management  styles,  which  have  also 
been  imparted  at  training  courses  over  the  years. 
In  addition,  in  2008  the  German  International  Co-
operation (GTZ) launched their ‘Afrika Kommt’ ini-
tiative with 12-month training courses in Germany 
co-sponsored  by  12  German  companies  including 
Volkswagen.

Infrastructure hub and gateway

The two assembly plants also reflect the way Ter-
minal 3 functions, both as an infrastructure hub and 
a  gateway.  The  infrastructure  at  Terminal  3  in  the 
Port of Tema ensures imports of parts for the plants 
and exports of assembled cars in an effective man-
ner with limited corruption. The fact that the plants 
are  within  the  free  zone  located  approximately  11 
kilometres  from  the  new  terminal  confirms  the  im-
portance  of  the  reliable  infrastructure.  Terminal  3 
has become a hub that ensures efficient and safe 
transshipment along various shipping lines to ports 

4  

  Robert Schuman Centre | February 2024

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  RSC | Policy Brief | Issue 2024/07 | February 2024

doi:10.2870/93720
ISBN:978-92-9466-528-7
ISSN:2467-4540
QM-AX-24-007-EN-N

Robert Schuman Centre for Advanced StudiesThe Robert Schuman Centre for Advanced Studies (RSCAS), created in 1992 and directed by Professor Erik Jones, aims to develop inter-disciplinary and com-parative research on the major issues facing the process of European integra-tion, European societies and Europe’s place in 21st century global politics. The Centre is home to a large post-doctoral programme and hosts major research programmes, projects and data sets, in addition to a range of working groups and ad hoc initiatives. The research agenda is organised around a set of core themes and is continuously evolving, reflecting the changing agenda of Europe-an integration, the expanding membership of the European Union, developments in Europe’s neighbourhood and the wider world.