The Ghanaian construction industry is bracing for another hike in cement prices, effective July 1, as manufacturers prepare to increase costs by GH₵12.00 per bag.
This follows a GH₵10.00 increase in May, marking a significant rise in prices over a short period.
Dr. Stephen Debrah-Ablormeti, former Vice Chair of the Ghana Real Estate Developers Association, revealed that cement manufacturers notified him of the upcoming price hike.
‘”The truth of the matter is that if you are on a project that takes 24 months to develop, given that cement contributes about 70% of the building components, any increase in cement prices will drive up the costs of blocks, concrete, and plastering materials,” he explained.
This escalation in cement prices significantly impacts construction costs, causing projects to experience cost increases of 30 to 45% within a single year.
Dr. Debrah-Ablormeti also noted that iron rod prices have surged by 28% over the past two months, further compounding the financial challenges faced by developers.
Dr. Debrah-Ablormeti emphasized the difficulty in managing costs under these conditions and expressed support for Trade and Industry Minister K.T. Hammond’s efforts to introduce regulatory measures.
“We strongly support the position of the Honorable Minister to push this agenda. With the backing of the industry, we should be able to establish some competition that will be equitable for all in the market,” he stated.
In response to the price hikes, K.T. Hammond has declared his intention to ignore a petition from the Chamber of Cement Manufacturers that seeks to delay the implementation of a legislative instrument (L.I.) aimed at regulating cement prices in Ghana.
Hammond stressed the necessity of this law to prevent exploitation by a cartel of manufacturers. The proposed L.I. includes penalties for violations, with cement manufacturers potentially facing up to three years in prison.
Despite opposition from the Minority in Parliament and various interest groups, Hammond remains steadfast in his decision to implement the regulatory measures.
He believes that these actions are essential to maintaining a fair and competitive market, ultimately benefiting consumers and the construction industry as a whole.