The Chamber of Cement Manufacturers, Ghana (COCMAG) has vehemently protested the reduction in benchmark value from 50% to 30% by Government saying it will result in high production cost and affect cement prices.
According to the Chamber, the local cement industry is already suffering from high production cost as a result of increase in cost of limestone, clinker, duties, transport/fuel increase, springing up of new cement factories and instability of the cedi against the major currencies with the dollar rate now GH¢7.3 and a possible GH¢8 in the near future, another policy that will add to the already existing burden will affect cement prices in future.
Local limestone producers in the country are also believed to be pushing for a price up by more than 60%, a situation which will automatically shoot up the cost of production of the cement product as well.
Commenting on the new development, Dr. George Dawson-Ahmoah, the Executive Secretary of COCMAG reiterated that the local cement industry is already suffering from high production cost and its attendant increasing levies as such a reduction in the benchmark value from 50% to 30% and a more than 60% increase in cost of limestone will add up to the already high production cost and ultimately cause a hike in cement prices.
“As we are all aware Ghana’s economic growth has slowed down and It is unfortunate, the benchmark reduction policy has taken of as at 1st March, 2022 because this will have a huge negative effect on cement raw materials especially the major one which is the clinker and now that the local producers of limestone are also pushing for a price increase of more than 60% we will have no choice but to push the burden to the consumer” he cautioned.
Rev. Dr. Dawson-Ahmoah therefore appealed to Government to rescind its decision in recognition that cement manufactured locally is sensitive to the national economy therefore factors constituting its production should be critically looked into to avert the increase or high cost of cement on the market.
The Chamber he emphasized stands by its position that the reduction of the benchmark on cement raw materials should be 50% whereas imported finished cement should be 0% so as to protect the local manufacturing of cement that value is added to.
Government’s Benchmark Policy
After months of agitation and weeks of consultations with stakeholders in the trading community on the benchmark values reduction policy, the government finally concluded on a 30 percent discount for all goods and 10 percent for vehicles.