According to cement manufacturers, the price of a bag of cement is likely to rise further and reach GH60 by the end of the year if urgent steps are not taken to review, suspend, or eliminate some taxes and levies that affect the build-up of production costs.
According to a report by The Business and Financial Times, the manufacturers claim they are in dire straits and have been forced to forego profits in order to stay in business – a situation that is gradually approaching a tipping point.
According to industry data, the retail price of cement has increased three times in the last seven months, resulting in a GH10 to GH12 or roughly 27 per cent increase and pushing retail prices to around GH50; a situation that has been described as unprecedented.
The manufacturers claim they have had to absorb a significant portion of the cost in order to keep prices at the current level; however, if the government does not implement measures to help mitigate the cost build-up, they will be forced to allow the price to run its natural course, which would be disastrous not only for them but also for the economy.
“Because cement is a strategic economic asset with national security implications, it should not be allowed to behave as it is. “Government must intervene, and we have presented papers to some ministries to do something urgently,”
Dr. George Dawson-Ahmoah, Executive Secretary of the Chamber of Cement Manufacturers Ghana (COCMAG), told the B&FT in an interview.
However, he acknowledges that both external and internal factors have contributed to the current state of affairs – but notes that, while external factors are difficult to change, some internal factors can be managed.
Reasons For The Increase In Cement Price
Cement is made up of Clinker, Gypsum, and Filler (Limestone). Clinker accounts for 80% of the cement, while gypsum accounts for 5% and limestone (or other constituents) accounts for 15%.
Imported clinker and gypsum The availability of clinker, the main raw material used in the manufacture of cement, became a major source of concern. The rise in raw material prices over the last year has been a significant challenge for the cement industry.
Delays at the port are said to be one of the most significant challenges confronting cement manufacturers. Any importer must adhere to contractual terms or face penalties.
Each day the vessel is delayed at anchorage or at the port results in a penalty of US$35-45,000… which used to be US$15,000 per day in demurrage prior to 2020.