Trade and Industry Minister Kobina Tahir (K.T.) Hammond has mounted a spirited defense of his controversial Legislative Instrument (L.I.) seeking to regulate cement prices in the country.

Contrary to manufacturers’ claims, he insisted that they have been consulted.

Attempts to lay the document in Parliament on Tuesday, June 26, were blocked by the National Democratic Congress (NDC) Members of Parliament, who insisted the L.I. must first be discussed.

Speaking to journalists in Parliament on Wednesday, June 26, K.T. Hammond noted that cement prices have been consistently escalating, and something must be done about it. He insisted that the L.I. is necessary to prevent a cartel of cement manufacturers from exploiting the public.

“At a point in time, we are not producing so much cement in the country. Now we have an installed capacity of over 11 million tons in the country. Our demand is nothing like 11 million, so it must be a very profitable enterprise.

“But I think it behooves those in responsible positions in authority to ensure that the good people of Ghana are not fleeced. I am not comfortable, I don’t believe that we’re getting good prizes for all that it’s worth,” he said.

The Trade Minister claimed that there is something fundamentally wrong with cement pricing in the country, emphasizing that every sector of the economy requires cement. In his words, “Now I take the view that it’s about time that the country was better served by those who are selling this product to us.

“You have a kind of arbitrariness in the pricing of cement. It’s been so haphazard, I strongly believe that there must be some sanity in the system,” K.T. Hammond said.

On Tuesday, June 25, the Chamber of Cement Manufacturers said they had not been consulted on the constitutional instrument. However, responding to these claims, K.T. Hammond indicated that he has made several attempts to engage the manufacturers morally, but without success. He said he now feels compelled to introduce a law to ensure manufacturers sell cement at reasonable prices.

“I asked them to ensure that something was done about it. In my absence, I was told that the minister wasn’t going to be able to do anything. They would not listen, they wouldn’t do it, and they would go the way they want.”

“Encouraging them to do it is a moral persuasion. If moral persuasion fails, there is a system in the country, there’s a constitution, and we are preyed by a rule of law.” The Trade Minister said there are laws governing the country, and if the constitution mandates him to bring an L.I. to regulate cement pricing, he will do so to ensure compliance.

According to K.T. Hammond “If we don’t accept the moral principle, at least some sort of economic principle, the good people of Ghana must benefit. I don’t think it is fair for the way they are pricing and the way, haphazardly each one of them decides and dictates how much a bag of cement should be sold for.

“This is quite apart from the quality that they are producing. Some of the companies are producing substandard products. We have had to deal with this matter,” he said.

Cement Price: Focus on competition law, not price regulation – CUTS Int’l to K. T Hammond

However, in an interesting twist Appiah Kusi Adomako, the Director for CUTS International (West Africa), has criticized the Minister for Trade and Industry, Kobina Tahir Hammond’s firefighting approach in the ongoing discourse on price regulation within Ghana’s cement industry, stating that it will not solve the cement pricing challenge.

CUTS International is a leading think-tank working on economic and public policy issues. From its modest beginnings in 1983, CUTS has grown significantly as a local and global research and advocacy group in addressing the challenges to enhance consumer welfare.

According to Mr. Kusi Adomako, the solution does not lie in price regulation but in fostering a competitive market through competition law.

In an interview with Bernard Alve on the Citi Breakfast Show, he argued that the focus should shift from legislative price controls to the establishment of a robust competition law.

In Mr. Appiah’s words: “The minister is getting a lot of things wrong in this particular discussion. Cement, as we know, is imported into the country, and the dollar-to-cedi exchange rate is a key factor that drives the prices up.

“If we want to regulate prices, the minister should not only target cement but also other commodity prices that are also going up; rice, cooking oil, and other consumer goods are also going up. But I am not sure that the minister can go to Makola and tell the importers of those products what to do. So long as we are in a free and competitive market, the economic aspects are the ones that will determine the prices of these goods.”

“The best approach that Ghana can use in the cement industry is not a price regulation but rather a competition law.”

Appiah Adomako currently leads the CUTS International West Africa Centre in located in Accra as the Director delivering results on trade and development, trade facilitation, competition policy and law, private sector development, investment, intellectual property, economic policy and capacity building for state and non-state actors on trade and development, investment and economic governance. He has over 20 years of experience in leading public policy formulation, implementation, consulting, antitrust economics and policy advocacy, advisory services, market research, private sector development, business strategy, entrepreneurship development, multilateral and bilateral trade relations in international trading systems including WTO, UNCTAD, and ECOWAS. Appiah has led several years of consulting for the World Economic Forum (WEF), World Bank Group, ECOWAS Commission, DFID, USAID, DANIDA, GIZ, Facebook, European Union, Ministry of Trade and Industry, ECOWAS Regional Competition Authority (ERCA), UN Food and Agricultural Organization. He has also undertaken diverse studies and consultancies in the areas of competition and market research, trade and investment facilitation (World Bank and World Economic Forum respectively), TVET education, AfCFTA, non-tariffs and technical barriers to trade, SPS, customs and transit procedure, competition policy, and law, enabling business environment, corporate governance, market research, e-commerce, digital economy, regional integration, budget and expenditure tracking, public finance and fiscal policies, and consumer voice in the West Africa integration, non-tariffs and reduction of technical barriers to trade, and consumer voice in the West Africa integration projects.

Appiah is a also solicitor and a barrister of the Supreme Court of the Republic of Ghana as well as bagged the LLB Law Degree from the University of London and a Qualified Law Certificate from the Ghana School of Law.

Trade Minister hasn’t engaged us on L.I. to regulate prices – Cement producers

The Executive Secretary of the Cement Manufacturers Association of Ghana (CMAG) Rev. Dr. George Dawson-Amoah has told the Trade Minister K T Hammond that they do not need a Legislative Instrument to regulate cement prices. Rev. Dr. George Dawson-Amoah further stated that they have not been consulted on the L.I. He asked the Minister to seek their views on it.

“Why is the Minister avoiding or just running away from this discussion? Previously, our position has been that these prices of cement, the increase of prices of cement, it is not done in a vacuum. It is not done just because we wake up in the morning and do it,” he said.

For him, the increasing prices of cement can be attributed to the fall of the Cedi against the dollar.

Source: CUTS International, Joy News, 3FM News , CitiNewsRoom