Economist, Dr. Ishmael Yamson, has condemned the government’s legislative instrument designed to regulate cement prices, calling it a setback that could harm the country’s investment prospects.
The former Unilever Ghana CEO argued that the measure represents a regressive move.
“This country was under price control for 24 years from 1961 to 1985. What did it do? Did it change anything in this country? Indeed, it made matters worse.
“They say it’s all about price control or price disclosure. But if you look at the LI, it says regulate. So what is the difference between regulation and control? No difference, take the dictionary, it is the same thing. In any case, when they say price disclosure, what element in the pricing don’t they understand?” he said on Joy News’ PM Express Business Edition.
Earlier this month, Trade Minister Kobina Tahir Hammond presented the Manufacturing of Cement Regulation 2023 (LI) to Parliament.
He stated that the regulation will require transparency regarding the methods used to determine cement prices.
Professor Alex Doodo, Director General of the Ghana Standards Authority, has asserted that the LI aims to address issues related to pricing.
However, Dr. Ishmael Yamson has expressed skepticism about the regulation, noting that it is well-known that about 78% of the components in cement production—clinker and gypsum—are imported.
“So if the whole Ministry of Trade is telling Ghanaians that they don’t know the price of clinker and gypsum, then let’s go and shut them down.
“Clinker is not imported every day; you may probably discharge a whole shipload once every three months or so, and Customs are there with the import document. They know the price at which the clinker was imported. The Ministry of Trade can get that information whenever they want. They don’t need the manufacturer to give them that when it is public information,” he stated.
Dr. Yamson stated, “There’s no secret about it. It’s a lie, let them come and challenge me that they can’t find the price of clinker imported into Ghana. I’ve heard some of them say some cabal is fixing prices…go to the market, you see all the cement selling at almost the same price.”
He pointed out that this is not the first instance of government overreach in this area, referencing a similar situation during the John Kufuor administration, which also faced allegations of manipulating cement prices.
“The predominant thing that drives cement prices is the exchange rate. You fix the exchange rate and the cement price will respond to that. Is the Bank of Ghana prepared to give cement manufacturers a fixed dollar rate for six months or a year?” he asked.
He argued that the current developments in the sector will create a negative signaling effect, potentially deterring both current and prospective investors from the country.
“You asked me to come to your country to invest because you have a free market economy, but now you are changing the dynamics with price regulation? I am worried by that because you don’t change the rules of the game midway,” he stated.
He pointed out that the Ministry of Trade may lack knowledge only about the specific conversion processes used by the more than 14 cement manufacturers in the country.
He added that these processes vary based on technology and efficiency, and the Ministry could explore this aspect if it seeks further understanding.
“It is a terrible thing, and if anything bad has happened to this country, it is this LI to control cement prices,” he said.