Government defends new legislative instrument on cement pricing

The Government has challenged claims that the new Legislative Instrument (LI) on cement pricing is anti-business and will negatively impact manufacturing firms in Ghana. Instead, the Government argues that the LI will foster full disclosure and transparency in cement price-setting.

Professor Alex Doodo, Chairman of the Cement Manufacturing Development Committee and Director General of the Ghana Standards Authority (GSA), discussed this on PM Express Business Edition with host George Wiafe.

“Investors will come to Ghana because the various sectors that they want to operate are better regulated and there is full disclosure on pricing to aid competition,” Professor Doodo asserted. He emphasized that requiring cement producers to fully disclose their pricing mechanisms cannot be equated to price control.

Background

Trade and Industry Minister K.T. Hammond recently laid the LI before Parliament, explaining that the move was prompted by sudden increases in cement prices. Mr. Hammond drew a parallel to the petroleum sector, stating, “We should see the same for cement products in the country.” He highlighted that the GSA’s Manufacture of Cement Regulation 2023 proposes the establishment of a Cement Manufacturing Development Committee to guide policy implementation.

Key Provisions in the Legislative Instrument

Mr. Hammond noted that amendments were made to the initial LI to address concerns, such as the inclusion of jail terms for directors of non-compliant cement companies. Some key requirements of the regulation include:

• Enforcement of applicable standards and guidelines for cement manufacturing firms.
• Establishment and enforcement of measures governing the operations of cement manufacturers.
• Full disclosure on pricing, regulating the entire industry.
• Cement manufacturers are expected to submit a monthly report on the ex-factory price of cement to the committee, considering costs such as transportation, distribution, profit margins, and other related expenses.

GSA’s Role in Sector Regulation

Professor Doodo remarked that other countries with similar policies have seen enhanced transparency in their industries. He believes Ghana can benefit similarly, improving the investment climate and competitive landscape for cement manufacturing.

The Government remains committed to implementing the new LI to ensure a fair, transparent, and well-regulated cement industry in Ghana, promoting healthy competition and protecting consumer interests.