The governments of Ghana and Germany have signed an agreement, Thursday that will lead to the setting up of a car assembling plant in the West African country.

The agreement will involve German car manufacturing giants Volkswagen if it is consummated.

This was disclosed by the President Nana Akufo-Addo as he received German Chancellor Angela Merkel at the Flagstaff House.

The German leader is on a day’s visit to Ghana to hold discussions with her Ghanaian counterpart on migration, trade and investment.

She is accompanied by a Federal Minister and a high-level business delegation.

Merkel would later join a panel discussion on a €100million  compact agreement for Africa which Ghana will be a beneficiary.

It is the first visit of a German Chancellor since 2004. Merkel is expected to visit Nigeria and Senegal from Ghana.

Addressing journalists, and representatives of the two governments Angela Merkel described Ghana as a “vanguard” of democracy and political stability.

She said the West African country has received best grades for the peace and stability it has recorded so far but said there was room for improvement in the country’s fight against corruption.

She said her country will work together with the Akufo-Addo led government in the fight against corruption, adding Ghana has made progress since the coming into power of the NPP government.

She called for more transparency in the tax administration in the country.

President Akufo-Addo on his part signalled the possibility of signing an agreement with Germany and the German car manufacturing company Volkswagen.

He said Merkel could not have come at an opportune time when Ghana is committed democracy, respect for human rights.

President admitted however that drug and human trafficking still remain a major challenge in the West African country which needed wider global collaboration to nip the canker in the bud.

He also spoke about the attempts by his government to build a strong economy to improve the standards of living of the citizens.

Nana Akufo-Addo said the visit by Merkel highlights the growing unity between the two countries and pledged Ghana’s commitment to work together for the betterment of the citizens of both countries.