The Member of Parliament (MP) for the Bole-Bamboi Constituency of the Savannah Region Hon Alhaji Yusif Sulemana is blaming the government of President Nana Akufo-Addo for the high cement prices the country is presently grappled with.

The Bole MP in a press statement dated 25th April, 2021 and copied to Bole based Nkilgi Fm said in 2009, when the NDC government took over from President JA Kufour, a 50kg bag of cement sold at GHc9.20 and at the end of the NDC’s 8 years, the same bag sold for GHc31, an addition of GHc21.8 or GHc2.7 increase per year.

“Today, a little over 4 years since taking over, the Akufo-Addo-Bawumia government has added GHc22 to what it inherited i.e. GHc5.5 increase every year” further stating that; “For people that claim to be the competent managers of this economy, bestowing such hardship on individuals and businesses is shocking”.

Alhaji Yussif Sulemana said;
“This is not what Ghanaians were promised. When president Akufo-Addo, then candidate Akufo-Addo, was all over describing the Mahama government as insensitive for selling fuel for GHc3.2 per litre, Ghanaians were justified to expect better”.

He added;
“When Dr Bawumia was moving from market to market asking for prices of goods for propaganda purposes, Ghanaians were justified to expect better and affordable prices of goods and services. Increasing taxes that were hitherto described as obnoxious is not better.

“Selling cement that hitherto sold for GHc31 at GHc53 is definitely not better”; the Bole MP said.

Read the full statement of the MP for the Bole-Bamboi Constituency Alhaji Yusif Sulemana:

BLAME PRESIDENT AKUFO-ADDO FOR HIGH CEMENT PRICES

Current discussions on the high cement prices fails to situate the blame where it rightly belongs. Historical review of cement prices confirms this. Today, cement is being sold at GHc53 in some parts of the country. In 2009, when the NDC government took over from President Kufour, a 50kg bag of cement sold at GHc9.20. At the end of the NDC’s 8 years, the same bag sold for GHc31 i.e. an addition of GHc21.8 or GHc2.7 increase per year.

Today, a little over 4 years since taking over, the Akufo-Addo-Bawumia government has added GHc22 to what it inherited i.e. GHc5.5 increase every year. For people that claim to be the competent managers of this economy, bestowing such hardship on individuals and businesses is shocking.

The impact of this astronomical cement price hike on the construction industry, the State and individuals is unbearable and profound. Cement is a major component in construction. As such, extreme increases in its price will fundamentally increase the cost of construction.

Specifically, for contractors with ongoing projects, this immediately affects project financing and therefore requires immediate remedial measures. Such measures will involve either the utilisation of project margins to meet the added cost or a renegotiation of contract terms in order to cater for these higher prices i.e. government has to pay more to execute ongoing contracts. In either case, there will be a loser; the contractor or the State. In the absence of government’s willingness to renegotiate the economic terms of these contracts, you will likely see inferior execution of projects through adjustment of quantities.

There is also the likelihood of stalling and delay in delivery of projects. At the individual level, the transmission of high cement prices to high cost of living is easily traceable. In this respect, people that are currently constructing homes will have to adjust their budgets upwards while their incomes remain unchanged or suspend their projects, altogether.

Those who seek rented homes are also going to expect higher rents as a result. This does not auger well for a nation with a housing deficit of about 2 million housing units.

What is totally appalling is how a government can be so insensitive as to bring such hardship on its own people. This situation is completely borne out of the lack of empathy on the part of the Akufo-Addo-Bawumai government. The current high cement prices are largely driven by government’s obnoxious taxes and killer fuel prices.

Firstly, before Covid-19, government imposed a US$0.50 per ton fumigation levy on imported clinker. Clinker is the main input or raw material for cement production. For Portland cement, it forms up to 95% of the total output. Accordingly, any tax imposed on it will automatically translate into higher cost of production. Government’s lack of consideration in maintaining this tax at this time when the Covid-19 pandemic has already driven import cost upwards is simply thoughtlessness. In fact, I am further fortified to describe President Akufo-Addo as insensitive when this year, in addition to the above, he increased the VAT flat rate on cement retail from 3% to 4% with the introduction of the 1% Covid-19 Health Levy.

Also, cement manufacturers like other manufacturers and even individuals are greatly affected by fuel price increases. Since January, 2021, fuel prices have been increased about 5 times. We began the year paying GHc4.86 per litre for both petrol and diesel.

Today, both are being sold for GHc5.64 per litre. This obviously impacts cement prices. Indeed, we shouldn’t be surprised to see further increases in prices. And this is because; firstly, we should expect fuel prices to go up again due to the current introduction of new taxes including the Energy Sector Recovery Levy of 20 pesewas per liter, and the Sanitation and Pollution Levy (SPL) of 10 pesewas per liter; and secondly, the current dumsor will force cement manufacturers to resort to the use of standby generators and in the process further increasing their costs of production.

I therefore use this opportunity to call on President Akufo-Addo and Vice President Bawumia to:

Remove the US$0.50/ton fumigation levy on imported clinker. This will immediately translate into production cost reduction and consequently a reduction in the price of cement.

Add cement retail to the exemptions list for the 1% Covid-19 Health Levy. This will automatically cause a proportionate drop in the price of cement since this is factored into the price build up.
Rethink the insensitive Energy Sector Recovery and Sanitation and Pollution Levies piled up on fuel prices in a pandemic era. Nothing can justify such inconsideration especially when every other country is doing the opposite.

In conclusion, this is not what Ghanaians were promised. When president Akufo-Addo, then candidate Akufo-Addo, was all over describing the Mahama government as insensitive for selling fuel for GHc3.2 per litre, Ghanaians were justified to expect better.

When Dr Bawumia was moving from market to market asking for prices of goods for propaganda purposes, Ghanaians were justified to expect better and affordable prices of goods and services. Increasing taxes that were hitherto described as obnoxious is not better. Selling fuel that was hitherto sold for GHc3.2 at GHc5.64 is not better. And obviously, selling cement that hitherto sold for GHc31 at GHc53 is definitely not better.
………..End…….

Hon Yusif Sulemana
MP, Bole/Bamboi
Deputy Ranking, Select Commitee on Trade, Industry and Tourism.