The Chamber of Cement Manufacturers (COCMAG) has given reasons for the recent price hikes in cement products.
According to the chamber, the price increase is hugely due to the depreciation of the Ghanaian cedi against the US dollar, which increases the production cost.
The Ghana cedi continues to lose ground to the major trading currencies this week, especially the US dollar.
The cedi was trading against the dollar at GH₵ 11.98 on Monday, May 13, but it crossed GH₵ 15.10 mark at the close of business on May 16 at the forex bureaus, resulting in a depreciation rate of close to 20% since the beginning of the year.
Businesses have expressed their frustration over the current state of the cedi.
The cement manufacturers’ justification follows the Minister for Trade and Industry, K.T. Hammond’s call for the Cement Manufacturing Development Committee (CMDC) to slash the prices immediately.
However, in a statement signed by the Chief Executive Officer of COCMAG, Dr George Dawson-Ahmoah, the chamber explained that the cement industry relies on imported raw materials priced in foreign currencies, particularly the dollar, which has increased costs.
“Additionally, some tariffs, levies, and taxes imposed by other authorities such as the Ghana Ports and Harbours Authority are also dollar-denominated, further exacerbating expenses,” the press release said.
The chamber stated that the prices of cement must be adjusted to ensure operational viability and product quality.
According to the chamber, although the new prices may affect consumers, there is a need to “partially offset increased manufacturing costs due to currency devaluation and other uncontrollable factors.”
The chamber assured its customers of providing quality cement at fair prices but acknowledged the potential for the prices of cement products to increase.
It noted that once economic conditions stabilise, cement prices will normalise.
“Acknowledging the understanding and support of all stakeholders, the Chamber reaffirms its dedication to Ghana’s construction sector development amidst these challenges.”
Economists, currency, and financial analysts have given many reasons for the cedi’s free fall.
Some believe that the persistent corporate demand for dollars has occasioned this.
Others also say the cedi’s poor performance is due to domestic and foreign factors, such as a rising US dollar against emerging markets currencies.
Rating agency Fitch, however, forecasts that the cedi will end 2024 at GH¢12.25 to a dollar.