No need to consult cement manufacturers on cement pricing L.I. – K.T. Hammond

The Trade and Industry Minister, Kobina Tahir Hammond, has disregarded calls by cement manufacturers for stakeholder consultations on the proposed Legislative Instrument(L.I.) to regulate cement pricing.

This comes after the Chamber of Cement Manufacturers(COGMAG) presented a petition to parliament registering their rejection of the proposed L.I.

COCMAG called on the house to decline the proposal, explaining that it had been presented without any prior consultation with the key stakeholders in the cement industry, including the manufacturers.

They also indicated that presenting the proposal without the needed consultations undermines the principles of fairness, transparency, and inclusion in decision-making.

“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 U.S. dollar.

“Addressing these challenges requires a comprehensive understanding and collaborative effort from all relevant parties, including the Ministry of Trade and Industry, cement manufacturers, and other stakeholders.”

“The unilateral attempt by the Hon. Minister to introduce this proposal to Parliament without engaging with us is not only unfair but also detrimental to the spirit of partnership and mutual respect that should guide our collective efforts to stabilize and grow the industry,” COCMAG indicated.

Responding to the manufacturers’ call, Mr Hammond said that although the manufacturers were not consulted during the drafting of the L.I., he had consistently had conversations with them about the need to be transparent about pricing.

He said his call for the cement manufacturers to self-regulate their pricing to prevent prices from shooting over the roof was not heeded.

“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 a reduction, I wanted us to understand the basis and the publication.”

“Get this information and let me know. I was told they said I couldn’t do it. On a simple matter of price publication and self-regularization I have been going on and on, it gets to a point when something has to be done, and what has to be done for me within the law is to get to parliament,” the Trade Minister said.

He stressed that the proposed L.I. would push cement manufacturers to be transparent with their production costs and other needed information to help create a price ceiling that benefits both them and consumers.

“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.”

“The price ceiling would be arrived at after the consideration of all factors involved. they would have to be transparent, sit down with the committee and explain to them how they would lose among others,” he added.

He believes that the L.I. is necessary to prevent exploitation of the public by cement manufacturers.

The trade minister said the L.I. would discuss all the nitty gritty, including the cost of production, profit margin, cedi depreciation, and others, to arrive at a price point.

In May 2024, the Minister for Trade and Industry, K.T. Hammond, instructed the Cement Manufacturing Development Committee (CMDC) to direct cement manufacturing companies in Ghana to reverse the price hike immediately.

However, the Cement Manufacturers Association (CMA) rejected this directive, citing production costs and the principles of a free market economy. The CMA stated that the directive was “without basis and justification” and refused to comply.

On June 25, the Trade Minister presented to Parliament an L.I. dubbed ‘The Ghana Standard Authority Pricing of Cement Regulations 2024‘ to gain legal backing.

But he faced fierce opposition in parliament.

The NDC MPs demanded that the L.I. go through pre-laying procedures before being formally laid on the floor.