The Trade Minister has dismissed calls by cement manufacturers for stakeholder discussions before the proposed legislative instrument aimed at regulating cement prices is placed before Parliament.
Speaking on JoyNews’ PM Express, Kobina Tahir Hammond said that although the manufacturers were not consulted during the drafting of the L.I., he had consistently had conversations with them on the need to be transparent about pricing.
He told the host, Evans Mensah, that he had pushed for the cement manufacturers to self-regulate their pricing to ensure prices were not shooting over the roof, however, his call was not heeded.
“I didn’t have to consult them in drafting the L.I., I warned them consistently that they couldn’t do what they’re doing [raising prices]. I consulted with them several times in my office, I told them what I wanted. I wanted them to be transparent, there to a reduction, I wanted us to understand the basis and the publication.”
“Get this information and let me know…I was told they said I couldn’t do it. On a simple matter of price publication and self-regularisation I have been going on and on…it gets to a point when something has to be done, and what has to be done for me within the law is to get to parliament,” the Trade Minister said.
KT Hammond insists that the proposed L.I. will push cement manufacturers to be transparent with their production costs and other needed information to help create a price ceiling beneficial to them and the consumers.
“The reality is very clear, the cedi hasn’t been performing greatly of late, we accept that there is a difficulty. But, let’s understand the pricing mechanism just as the petroleum sector is regulated by the NPA, so everyone knows the basis.”
“The price ceiling would be arrived at after the consideration of all factors involved. they would have to be transparent, sit down with the committee and explain to them how they would lose among others,” he added.
He believes that the L.I. is necessary to prevent exploitation of the public by cement manufacturers. As such, the committee set up would discuss all the nitty gritty including the cost of production, profit margin, cedi depreciation and others to arrive at a price point.
This comes after the Chamber of Cement Manufacturers presented a petition to Parliament registering their outright rejection of the proposed L.I.
COCMAG called on the house to decline the proposal explaining that it was presented without any prior consultation with the key stakeholders in the cement industry, including the manufacturers.
Presenting the proposal without the needed consultations undermines the principles of fairness, transparency, and inclusive decision-making, they indicated.
“We firmly believe that the issues leading to the escalation of cement prices are complex and multifaceted, primarily driven by the rapid and consistent depreciation of the Ghanaian cedi against the US dollar.
“Addressing these challenges requires a comprehensive understanding and collaborative effort from all relevant parties, including the Ministry of Trade and Industry, cement manufacturers, and other stakeholders.”
“The unilateral attempt by the Hon. Minister to introduce this proposal to Parliament without engaging with us is not only unfair but also detrimental to the spirit of partnership and mutual respect that should guide our collective efforts to stabilize and grow the industry,” the letter read.
Background
In May 2024, the Minister for Trade and Industry, K.T. Hammond instructed the Cement Manufacturing Development Committee (CMDC) to direct cement manufacturing companies in Ghana to immediately reverse the hike in price increase.
However, the Cement Manufacturers Association (CMA) rejected this directive citing production costs and the principles of a free market economy, stating that the directive is “without basis and justification” and has refused to comply.
On June 25, the Trade Minister presented to Parliament an L.I dubbed ‘The Ghana Standard Authority Pricing of Cement Regulations 2024‘ to gain legal backing. But he faced fierce opposition in Parliament.
The NDC MPs demanded that the legislative instrument (LI) go through pre-laying procedures before being formally laid on the floor.
The L.I
Manufacturers of cement products could be liable to up to three years in jail if they flout certain provisions of the Legislative Instrument (L.I.) being proposed by Trade Minister, K.T Hammond.
Speaking on Newsnight, Evans Mensah indicated the document “sets what they call a maximum allowable retail price for cement, so call it a price ceiling beyond which no manufacturer can sell a bag of cement,” he told Emefa Apawu.
Evans Mensah explained that the proposed legislation “is actually proposing stiff penalties for all manufacturers who violate the terms of the L.I. including up to three years in imprisonment.”
The document spells out who specifically suffers the penalty if the regulations are flouted.
“It talks about the fact that in the case of a body corporate, every director and Officer of that body corporate is deemed to have committed that offence.
“In other words, if you violate this and you sell above the price ceiling, the directors of the company, the officers of that body corporate will be thrown into jail if indeed you’re found guilty up to three years in jail.”
“And then he says in case of a firm, or partnership, every partner of the firm or partnership or any other person concerned with the management of the firm is deemed to have committed that offence.”
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