Trade Minister Kobina Tahir Hammond has dismissed calls from cement manufacturers for stakeholder discussions before presenting a legislative instrument (L.I.) aimed at regulating cement prices to Parliament.
Speaking on JoyNews’ PM Express, Hammond explained that although manufacturers were not consulted during the drafting of the L.I., he had ongoing conversations with them about pricing transparency.
“I didn’t have to consult them in drafting the L.I. I warned them consistently that they couldn’t do what they’re doing [raising prices]. I consulted with them several times in my office, I told them what I wanted. I wanted them to be transparent, there to be a reduction, I wanted us to understand the basis and the publication,” he said.
Hammond stated that he had urged cement manufacturers to self-regulate their pricing to prevent prices from skyrocketing, but his efforts were ignored. He believes the proposed L.I. will push manufacturers to be transparent about production costs and create a beneficial price ceiling.
“The reality is very clear, the cedi hasn’t been performing greatly of late, we accept that there is a difficulty. But, let’s understand the pricing mechanism just as the petroleum sector is regulated by the NPA, so everyone knows the basis,” he explained.
Hammond added that the price ceiling would be determined after considering all factors, including production costs, profit margins, and currency depreciation. He emphasized the need for the L.I. to prevent the exploitation of the public by cement manufacturers.
This move follows a petition by the Chamber of Cement Manufacturers to Parliament, rejecting the proposed L.I. due to a lack of prior consultation with key stakeholders. They argued that addressing the issues behind cement price hikes requires a collaborative effort from all relevant parties.
“We firmly believe that the issues leading to the escalation of cement prices are complex and multifaceted, primarily driven by the rapid and consistent depreciation of the Ghanaian cedi against the US dollar. Addressing these challenges requires a comprehensive understanding and collaborative effort from all relevant parties,” their letter stated.
Background
In May 2024, Hammond instructed the Cement Manufacturing Development Committee (CMDC) to reverse the recent price hikes. However, the Cement Manufacturers Association (CMA) rejected this directive, citing production costs and free market principles.
On June 25, Hammond presented the L.I. titled ‘The Ghana Standard Authority Pricing of Cement Regulations 2024’ to Parliament, facing fierce opposition. NDC MPs demanded that the L.I. undergo pre-laying procedures before being formally presented.
Under the proposed L.I., cement manufacturers could face up to three years in jail for violating price regulations. The document sets a maximum allowable retail price for cement and imposes stiff penalties on violators, including corporate directors and officers.
“In the case of a body corporate, every director and officer of that body corporate is deemed to have committed that offence,” Hammond explained.
“If you violate this, and you sell above the price ceiling, the directors of the company, the officers of that body corporate will be thrown into jail if indeed you’re found guilty up to three years in jail.”