Parliament must reject LI seeking to regulate cement prices – CUTS Int’l

Consumer Protection Organisation, Cuts International, has urged members of parliament to reject attempts by the government to introduce a proposed legislative instrument aimed at regulating the price of cement in Ghana.

According to the director of Cuts International (West Africa), Appiah Kusi Adomako attempts to regulate cement prices will deter investors, which can crush the industry and must, therefore, not be tolerated.

“In the case of cement, when you want to regulate prices, what it means is that the industry will not even have any incentive to invest in it again. Let’s say everyone should sell 42r cement at, let’s say, GH¢100. There are others who can sell the same brand for GH¢85, and this will not be the best for the economy.

“Price regulation is bad. Neither does it help the producer nor the consumer because you are going to create what is termed debt weight loss in economics. Demand and supply are the best ways of allocating resources, and if you ask me if price regulation is the best, I will say no,” he said on Channel One TV.

Mr. Kusi Adomako added, “This [LI to regulate prices] approach is wrong because it may even be that cement manufacturers have ganged up and fixed prices, and the tool to fixing that is not price regulation. There is a law called the Competition and Anti-trust Law which has been lying at the Trade Ministry for the past 60 years.

“That competition and fair trade bill is the best tool to regulate anti-competitive practices in the industry and not just in the cement industry. I think that the minister is wrong, and I expect Parliament to reject the LI with all the powers available to them.”

This LI, sponsored by Trade and Industry Minister K.T. Hammond, has faced resistance from cement manufacturers who have urged Parliament not to approve it.

Meanwhile, the minority in parliament has vowed to oppose the LI vehemently.