If Cedi falls against the Dollar, it automatically affects cement prices because of clinker importation – Alan

Asked for his view on the introduction of the Legislative Instrument (L.I) by Trade Minister KT Hammond to control the prices of Cement, while speaking on the New Day show on TV3 Monday, July 1, he said “It has a multiplying effect on the economy when prices of cement and petroleum products go up, it ought not always to be the case but sometimes that shows how our economy is structured. Anytime you have an imported product, and cement has about 85 to 90% imported raw materials which is the clinker and the Cedi depreciates it has an effect on the cost.

“If you solve the fundamental problem you don’t need to control prices. That can easily be resolved. When you legislate pricing then you are also affecting the market structure because we have opted for a field market operation.”

He added, “At this point, we need administrative control rather than legislative control…you need to meet the industry and other stakeholders  and agree, rather than introduce a legislation.”

The cement producers have raised issues against the instruction of the Legislative Instrument by Trade by Trade Minister KT Hammond to control the prices of cement

the Executive Secretary of the Cement Manufacturers Association of Ghana (CMAG) Rev. Dr. George Dawson-Ahmoah said that unfavorable economic conditions in Ghana are causing them to increase the prices of cement.

He stated that no cement producer is happy with increasing prices.

“No cement manufacturer is happy with increasing prices. we do that because of an unfavorable economic situation,” he said on the Key Points on TV3 on Saturday, June 29.

Rev. Dr. George Dawson-Ahmoah said on the Key Points on TV3 Saturday, June 29 that the rapid depreciation of the local currency has been impacting their operations, forcing them to raise the prices of cement.

Clinker which is a major component of cement production, is imported hence the depreciation of the Cedi’s impact on their business, he said.

“It has a huge impact on the pricing of cement. There are other factors but currently this is a major concern now and that is what has motivated the Minister to rush to parliament to regulate prices. Why didn’t he do it last year?” He said.

Rev. Dr. George Dawson-Ahmoah had told Trade Minister K T Hammond that the increasing prices of cement can be attributed to the fall of the Cedi against the Dollar.

Rev Dawson-Ahmoah said they do not need a Legislative Instrument to regulate cement prices.

Rev. Dr. George Dawson-Ahmoah further stated that they have not been consulted on the L.I. He asked the Minister to seek their views on it.

“Why is the Minister avoiding or just running away from this discussion? Previously, our position has been that these prices of cement, the increase of prices of cement, it is not done in a vacuum. It is not done just because we wake up in the morning and do it,”  he said.

“It is as a result of a negative trend in the economy, which is warranting such increases, and that is the issue. And like I said, what is happening now with cement prices is just because of the rapid and consistent depreciation of the cedi against the foreign currencies.

“We don’t know anything about it. And with my common knowledge in legislative instruments, don’t you involve stakeholders before it gets to Parliament? Don’t you involve stakeholders in the process?” he quizzed on Tuesday.

But KT Hammond told journalists in Parliament on Wednesday, June 26 that he had engaged them.

“I asked them to ensure that something was done about it. In my absence, I was told that the minister wasn’t going to be able to do anything.

“They would not listen, they wouldn’t do it, and they would go the way they want. “Encouraging them to do it is a moral persuasion. If moral persuasion fails, there is a system in the country, there’s a constitution, and we are preyed by a rule of law. If we don’t accept the moral principle, at least some sort of economic principle, the good people of Ghana must benefit. I don’t think it is fair for the way they are pricing and the way, haphazardly each one of them decides and dictates how much a bag of cement should be sold for.

“This is quite apart from the quality that they are producing. Some of the companies are producing substandard products. We have had to deal with this matter,” he said.

An attempt to lay the document in Parliament on Tuesday, June 26, was blocked by the Minority.

The opposition lawmakers insisted the L.I. must first be discussed.