The Minister of Trade and Industry, Mr. Kobina Tahir Hammond, has emphasized that the purpose of Legislative Instrument L.I 2480 is to regulate and ensure transparency in the cement industry, not to control cement prices.
He explained that it was discovered that some companies were not adhering to proper standards in their production processes, leading to substandard cement products.
“L.I does not seek to control prices; we only regulate the production and purchase ends. We want to know what is going on. The Committee we set up will require monthly reports on your prices,” Mr. Hammond stated.
He added that if the committee finds prices outrageous, a manufacturer’s license could be revoked.
In a meeting with the Chamber of Construction Industry, the Minister highlighted the issues that led to the creation of the L.I. Mr. Hammond noted that the ministry faced two primary issues in the cement industry: the production of substandard products and pricing concerns.
The ministry collaborated with the Ghana Standards Authority to develop an L.I aimed at regulating cement production to ensure proper standards. Pricing was also a significant issue affecting cement users. While acknowledging that exchange rates and taxes impact production costs, Mr. Hammond emphasized the need for a balance between production costs and selling prices. He stated, “No one is saying you shouldn’t make a profit, but there should be a reasonable amount of profit. I don’t understand why we constantly hear about price increases.”
The decision to regulate the cement industry was based on these reasons. The Minister noted that consultations were conducted before finalizing the L.I.
The L.I includes guidelines on the proper ingredients for cement production, cost of production, profit margins, and sanctions for breaches of its provisions. The regulation responds to the concerns of Ghanaian consumers, as substandard cement could lead to building collapses.
The Ghana Standards Authority (Manufacture of Cement) Regulation, 2023 (L.I. 2480), aims to ensure the quality and safety of cement products. Approved unanimously by Members of Parliament, the regulation sets stringent standards for cement production to protect consumers and promote industry best practices. It was gazetted on November 23 and took effect on December 22, 2023, requiring entities intending to manufacture cement to obtain a license.
Mr. Obeng, president of GUTA, emphasized the importance of stakeholder engagement for clarity. He stated that while Ghana operates a liberal economy, the L.I is crucial for regulation and price reporting, ensuring transparency and benefiting Ghanaian consumers. “The L.I is not about price control but transparency,” he said.
Surv. Emmanuel Martey, Chairman of the Ghana Chamber of Construction Industry, expressed concerns that the L.I might not conform to the mother law. He indicated that they would review the explanations given by the Minister and assess the production costs of manufacturers. Martey acknowledged that both sides presented their points and emphasized the need for further engagement with cement manufacturers to smooth out any issues. “We are working in the interest of the country,” he stated.
By Eugene Davis
