The President of the Ghana National Chamber of Commerce and Industry (GNCCI), Dr Clement Osei Amoako has appealed to the Minister of Trade and Industry, K.T Hammond to take a second look at plans to control cement pricing in the country.

“As a country, we have gone past the era of controlling prices. I don’t think that is the way to go”, Dr Amoako said on PM Express Business Edition with host, George Wiafe on June 27, 2024.

He argued that price control is an economic model that will not work in the cement manufacturing business.

“People have invested in their business, produced a commodity and you want to determine how much that commodity should be sold”, he quizzed.

He stressed that Ghana operates a free market system that allows market forces to determine prices and not the government.

“We have all come to accept now that, we are a free market economy and therefore let’s allow forces of demand and supply to determine prices”.

Background

Mr Hammond this week introduced a legislative Instrument to help prevent cement manufactures from exploiting the public. Under the proposed legislative instrument, cement manufactures could face up to three years in jail for failing to comply with this legislation. 

In May 2024, Mr Hammond instructed the Cement Manufacturing Development Committee (CMDC) to direct cement manufacturing companies in Ghana to immediately reverse the hike in prices.

However, the Cement Manufacturers Association (CMA) rejected the directive citing production costs and the principles of a free market economy, stating that the directive is "without basis and justification."

Impact of this move on the economy

Dr Amoako is however worried that the move by the Trade Minister may rather end up increasing prices on the market.

“There are a lot players on the market, and this could result in these players creating artificial shortage, and that could be worse than what the Trade Minister is trying to correct” he said.

“We should be careful how we go about this because it could backfire”, he warned.

Describing the Legislative Instrument as not business friendly, Dr Amoako said it is not the duty of government to regulate prices.

“Firms have invested so much in their businesses to produce goods and they are not being allowed to price right to make returns on their investments”.  

On the conclusion of the debt restructuring programme, Dr Amoako welcomed the progress made by government in reaching a deal with the creditors and Eurobond holders.  

“This will help to restore investor confidence in the economy, looking at what has happened over the past two years”.

“Businesses have struggled over the years, from high interest, soaring inflation and a depreciating cedi, and not so favourable business environment”, he said

He described the development as a big relief for businesses, particularly manufacturers.

“We are also expecting the Ghana cedi to respond positively to this development, as we have already seen some marginal stability and we want that to continue”.

He, however wants the government to institute the structures that will aid fiscal prudence after the debt restructuring deal.

“We are worried about past developments, but we believe that government has learnt its lessons when it comes to the economy”.  

The PM Express  programme

The programme looked at the impact of the debt restructuring deal and its effect on businesses and the economy at large.

Other panellists on the programme included  Partner at accounting firm, Deloitte, Yaw Lartey  and Economist Dr Adu Owusu Sarkodie.