Chamber of Cement Manufacturers CEO warns of production cuts amid proposed price control legislation

he CEO of the Chamber of Cement Manufacturers, Dr. George Dawson-Amoah, has issued a stark warning regarding a proposed Legislative Instrument (LI) aimed at controlling cement prices.

Speaking in an interview on PM Express on Thursday, Mr Dawson-Amoah cautioned that enforcing unprofitable price levels could lead to significant market distortions and a potential cement shortage in Ghana.

“If you force a producer to sell at that price, and it’s not profitable, there’s market distortion. He/she would not produce, and if they don’t produce, then there will be a shortage. Is Ghana ready for a cement shortage?” He queried.

He emphasized that the capital-intensive nature of the cement industry would deter investors if prices were set too low, leading to curtailed investments and potential job losses.

“If you’re going to force me to sell at a price that is not profitable, investment will be curtailed. Don’t forget, we have workers and other costs, so the workers will be affected,” he elaborated.

Dr. Dawson-Amoah accused the government of prioritizing political expediency over economic rationale, especially in an election year.

“The thought that went into regulating cement prices is more politically motivated than economic. But we need to ask if Ghana is ready for it. Economically, Ghana is not ready for it,” he stated. He also questioned the timing of the proposed LI, noting that discussions were initiated in an election year rather than in 2023.

The warning follows months of disagreements between the Chamber and the sector ministry over the proposed legislation. The Chamber has raised concerns that the LI would undermine their businesses by failing to address the root causes of cement price escalation.

“The proposed LI undermines fairness, transparency, and inclusive decision-making and fails to address the complex issues driving cement price escalation,” a statement from the Chamber read last week.

The Trade Minister has laid the LI in Parliament, awaiting its maturation and passage into law. This move disappointed the Chamber CEO, who claimed that his members and other stakeholders were not consulted prior to the LI being laid.

Contrarily, Prof. Alex Dodoo, Director General of the Ghana Standards Board, has argued in favor of regulation, stating, “We have an industry that was never regulated. You begin to regulate it, and players who have been calling the shots to Ghanaians begin to present a different face.”

He also disagreed with claims that the directive is politically motivated.

The ongoing debate highlights the tensions between economic policy and political strategy in Ghana’s cement industry as the proposed legislation progresses through Parliament.

Source:norvanreports.com