Consumer protection in the cement industry – the bare facts

On July 12, 2024, 3:00 AM

The Minister for Trade and Industry, Kobina Tahir (K.T) Hammond is the first Trade Minister to successfully introduce legislation for the regulation of the cement industry in Ghana.

This is to protect consumers as far as the quality and eventually affordability of cement are concerned.

The legislation, known as “The Ghana Standards Authority (Manufacture of Cement) Regulations, 2023 (L.I. 2480)” was gazetted on 22nd November 2023, and came into force on 22nd December 2023.

So, what is the state of the cement industry in Ghana today and what is the Ministry of Trade and Industry doing to protect consumers whilst facilitating trade and protecting the cement industry? Also, why is the Chamber of Cement Manufacturers of Ghana (COCMAG) complaining when it is part of the body that regulates cement in Ghana?

Quality of cement in Ghana today

Data from the Ghana Standards Authority (GSA) indicate that the quality of cement offered for sale to Ghanaians has been deteriorating with some manufacturers supplying substandard cement. This is dangerous and will lead to catastrophic consequences. To sanitise the market, non-compliant manufacturers have been closed down and any other non-compliant company would be closed down. The GSA has intensified surveillance and random testing of cement products and regulatory sanctions when required.

Accuracy of weight of cement

The weight of some 50 kg bags of cement has been found to be less than 50kg. The implication of this is that some consumers are being short-changed. The GSA, as the regulator of weights and measures will ensure that all manufacturers who supply underweight products are sanctioned in accordance with the Ghana Standards Authority Act, 2022 (Act 1078). Repeated infarctions will lead to further sanctions including suspension and revocation of the licenses of the manufacturers involved as prescribed by law.

Affordability of Cement

The price of cement in Ghana is high. The forces of demand and supply appear not to work in the Ghana cement industry and there is little transparency in the pricing of cement and cement products in Ghana. The Cement Manufacturing Development Committee (CMDC) established under LI 2480 is tasked to “promote the manufacture, wholesale and retail of cement and cement components”. The 9-member CMDC is the regulator for the cement industry, and it includes one representative from the Association of Ghana Industries and another from the Chamber of Cement Manufacturers of Ghana (COCGMAG). The cement industry is therefore cloaked with legal power to regulate the cement industry together with government and academia.

Why is COCMAG complaining?

The cement industry has on countless occasions given assurance that it will publish its ex-factory prices of cement. That has not happened. The Ministry of Trade and Industry has therefore laid a legislative instrument (L.I.) to mandate the cement industry to publish ex-factory prices of cement. The Chamber of Cement Manufacturers of Ghana appears unhappy with the legislation.

Is government setting “control prices” for cement?

The emphatic answer is no. Government is NOT setting “control prices” for cement. In a bid to protect consumers against arbitrary charges for cement, the Minister for Trade and Industry has repeatedly asked cement manufacturers to independently publish the ex-factory prices of cement monthly. Regular publication of prices will keep consumers updated on trends in prices and prevent arbitrary price hikes by retailers. The industry did agree to publish prices so as to promote transparency. The industry has however failed repeatedly to publish the ex-factory prices of cement.

The Minister of Trade and Industry has therefore presented legislation that requires the regulator of cement, the CMDC to require manufacturers to publish their ex-factory prices monthly. Since the CMDC has 2 members representing cement manufacturers (AGI and COCMAG), this should ordinarily be easy to do.

Concrete solutions for the cement industry in Ghana

Cement is the most widely used commodity in the world. Ghanaian consumers have a right to expect that cement in Ghana is of the applicable standard in relation to quality and weight. Furthermore, consumers have a right to expect to pay affordable prices for cement. A key practice towards ensuring fair and acceptable prices of products is transparency. Transparently publishing prices allows any price increases associated with exchange rate fluctuations or other external factors to be appreciated and accepted. This has been done in Ghana for years in the pricing of petroleum products and Ghanaians have become accustomed to it. Other industries, including the cement industry should follow suit in the interest of the consumer.

The cement industry in Ghana has for a long time not been regulated. The introduction of regulations is making some stakeholders uneasy. Legislation is important since it strengthens the industry and protects consumers. It is therefore incumbent for all players in the cement industry to support full transparency in the pricing of cement and disclosure of the quality and weight of cement circulating in retail in Ghana. Thankfully, the 2 key industry players – AGI and COCMAG are part of the regulatory regime for cement in Ghana. They should therefore support government to build a strong, open and competitive cement industry in Ghana.

Professor Alex Dodoo, Chairman, Cement Manufacture Development Committee and Director-General, Ghana Standards Authority

Story By Professor Alex Dodoo