Economist Dr. Ishmael Yamson says cement manufacturers have not been operating at their optimum capacity and he fears for the worst.

He disclosed on Joy News’ PM Express Business Edition that the capacity utilisation of cement manufacturers in Ghana has dropped from 48% in 2023 to 38% this year.

Criticizing the government's legislative instrument aimed at controlling cement prices, the former Unilever Ghana CEO said it is a regressive development that will negatively impact the country’s investment drive.

Read also: Cement shortage imminent as legislative price control could slash production – Dr Dawson-Amoah

“You think they are happy to build their factory and use only 30% of the capacity and lose money? Who in his right sense will do that?” he questioned.

Dr Yamson said the whole idea of regulating prices in a free market economy is misguided and will come to nought.

“This country was under price control for 24 years from 1961 to 1985. What did it do? Did it change anything in this country? Indeed, it made matters worse.

“They say it’s all about price control or price disclosure. But if you look at the LI, it says regulate. So what is the difference between regulation and control? No difference, take the dictionary, it is the same thing. In any case, when they say price disclosure, what element in the pricing don’t they understand?” he stated on Thursday.

Read also: Withdraw LI on cement pricing for further engagement – Dr Oteng-Gyasi

Trade Minister Kobina Tahir Hammond earlier this month laid before parliament the LI on Manufacturing of Cement Regulation 2023.

According to him, the instrument will demand disclosure of the mechanisms used to set the prices of cement.

The Director General of the Ghana Standards Authority, Professor Alex Dodoo, has explained that the LI will resolve the challenges identified in setting the price.

Read also: Fix exchange rate and cement prices will respond to that – Ishmael Yamson to government

Dr Yamson questioned the LI and what it seeks to achieve, stating it is public knowledge that approximately 78% of what goes into cement manufacturing is clinker and gypsum, which are all imported.

“Instead of looking for why cement prices are going up, we find somebody to blame and it happens in Ghana every time. Every time government wants somebody to blame.

“Two years three years ago was a better price at this level? So the government has driven the exchange rate from GH¢6 in 2020 to GH¢15.5 this morning, you are telling me the cement price must still stay at the price when the dollar I was using to import the clinker and gypsum has now more than doubled?” he quizzed.

He further said, “The predominant thing that drives cement prices is the exchange rate. You fix the exchange rate and the cement price will respond to that. Is the Bank of Ghana prepared to give cement manufacturers a fixed dollar rate for six months or a year?”

According to him, the signalling effect of what is happening in the sector will drive investors and potential investors away from the country.