Happy K.T Hammond promises fair cement prices as new regulatory law is passed

This comes after the controversial Legislative Instrument (LI) on cement pricing took effect following the mandatory 21-day maturity period.

According to him, the new regulations aim to ensure fair cement pricing across Ghana.

He said “I am clear beyond argument that there is a certain amount of unfairness in the pricing of cement in the country and I am prepared to make sure that there is some sort of sanity. The document [LI] as we speak is in force.

“I have a legislative instrument and it is essentially this, the last argument was that we were going to cap the price [of cement] at which they were going to sell. We indicated that that wasn’t it.

“We are going to put in place by virtue of the L. I which has come into force, a committee and the committee is going to ask all the manufacturing companies to put before them the basis for their pricing.”

K.T. Hammond emphasised the government’s commitment to maintaining a competitive and transparent market for cement, a key component in the construction industry.

He stated that the new law is designed to protect consumers from unjustified price hikes while also ensuring that manufacturers can operate profitably.

In May 2024, cement was priced between GH¢85 to GH¢90 per bag, depending on the brand and quality. As of 4 June 2024, prices have escalated to about GH¢110, based on reports from dealers in Pokuase.

Specific prices from various dealers reveal the extent of the increase: Dzata cement (42R) is now selling at GH¢108, Cimaf cement (42R) at GH¢107, Cimaf cement (32R) at GH¢87, and Ghacem cement (42R) at GH¢110, the highest in the market. Meanwhile, Diamond cement ranges from GH¢75 to GH¢85, and Dangote cement is priced between GH¢92 and GH¢94.

Ghanaians should be informed about the challenges facing the cement industry.

The Cedi’s 104% depreciation since 2022 has significantly driven production costs, with 77% of inputs tied to the dollar.

Despite these pressures, the industry has managed to absorb a large portion of these costs, raising prices by only 48% during the same period. Without this absorption, cement prices would have been GHS 35 ($2.30) more per bag.

Additionally, it’s important to recognise that Ghana’s cement industry stands as a model of competition in West Africa, with 14 manufacturers, surpassing Nigeria’s 12 and Togo’s five.

As a result, Ghana enjoys some of the lowest cement prices in the region, though 30% of the cost comes from government taxes and fees.

However, the ongoing standoff between the cement industry and the Ghana Standards Authority (GSA) poses a risk to the construction sector, potentially leading to higher consumer prices.