A contentious debate over cement pricing in Ghana has escalated this week, with the Chamber of Cement Manufacturers (COCMAG) vehemently opposing proposed government regulations aimed at fixing prices.

Frédéric Albrecht, the association’s chair, argued that nearly 80% of local production costs are influenced by fluctuations in the local currency exchange rate, suggesting that price fixing would fail to address the root cause of price hikes.

Speaking at a stakeholders’ forum organized by the Ghana Chamber of Construction, Albrecht criticized the government’s Ghana Standards Authority (GSA) proposal, formally introduced in parliament earlier this month.

The COCMAG contends that the cement sector was insufficiently consulted on these regulations and warns of potential adverse impacts on the broader construction industry.

They assert that taxes on imported clinker and other factors have not been adequately considered, and that cement prices have actually lagged behind inflation rates.

Ghana’s government has been grappling with severe economic challenges since defaulting on external debts in 2022, leading to high inflation and currency depreciation.

In response, regulatory bodies such as the GSA and Ghana Revenue Authority (GRA) have intensified oversight of the cement sector. Recent actions include shutting down cement plants for operating without proper permits and using substandard materials in production.

In April 2024, a committee was formed to monitor and coordinate the local cement industry, requiring producers to register for manufacturing licenses. Despite these measures, Trade and Industry Minister Kobina Tahir Hammond announced in late June 2024 the government’s intention to intervene in cement pricing, citing concerns over unpredictable price increases imposed by manufacturers.

The cement industry in Ghana, dominated by grinding plants, faces vulnerabilities exacerbated by currency fluctuations. While one integrated cement plant operates in the north, the majority of facilities are grinding plants owned by international companies such as CIMAF, Dangote Cement, and Ghacem.

This structure, akin to other Sub-Saharan African nations like Mozambique and South Africa, highlights Ghana’s significant reliance on imported clinker, a critical component of cement production.

The ongoing discourse echoes similar debates in neighboring Nigeria and underscores broader challenges in regulating commodity prices amidst economic crises. Analysts caution that while fixed prices may temporarily reassure consumers, addressing underlying causes such as inflation and currency volatility remains crucial.

As Ghana navigates these complexities, the outcome of the cement pricing debate will likely shape future economic policies, influencing both industry stakeholders and consumers alike.