Cement price increases to GHC110 per bag in Ghana

Ghanaian journalist and businesswoman Bridget Otoo has revealed in a tweet on May 13, 2024, that the price of cement in Ghana is set to see significant increases.

This revelation has sparked widespread attention and concern among consumers and industry stakeholders, given the essential role of cement in construction and infrastructure development.

Her tweet included an image resembling a screenshot from a WhatsApp conversation among cement wholesalers, who were discussing the new price adjustments.

Previously, cement was priced at GHS 95.5 and was sometimes sold at GHS 100 in retail shops.

However, according to the latest information, the new price stands at GHS 102, excluding GHACEM, one of the major cement producers in the country.

The tweet read: “The price you are seeing is exclusive of transportation and offloading. Then the retailer would add his/her profit. 95.5+3.5=99 plus profit of 3 cedis 102 … and I used the least amount in doing the calculation; depending on your location, it could go higher. This is not even GHACEM so imagine when GHACEM goes up! Wow!”

This statement highlights the complexity and variability of cement pricing, influenced by additional costs such as transportation, offloading, and retailer margins.

It is expected that GHACEM, given its market position, will be sold at an even higher price, which could vary significantly depending on the customer’s location.

This means that the final retail price of cement could exceed GHS 110 per bag in some areas, placing additional financial pressure on construction projects and potentially slowing down building activities.

Over the years, cement prices in Ghana have undergone notable fluctuations, driven by various factors such as energy costs, transportation costs, exchange rates, and raw material availability.

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The latest price increase can be attributed to several underlying factors:

1. Energy Costs: The production of cement is energy-intensive, requiring significant amounts of electricity and fuel.

Any increase in energy prices directly impacts the cost of cement production, which is then passed on to consumers.

2. Transportation Costs: Cement needs to be transported from manufacturing plants to distribution centers and retail outlets.

Rising fuel prices and logistical challenges can drive up transportation costs, contributing to higher cement prices.

3. Exchange Rates: Ghana imports some of the raw materials needed for cement production. Fluctuations in exchange rates can affect the cost of these imports.

A depreciation of the Ghanaian cedi against major currencies can lead to higher import costs, which are reflected in the final price of cement.

4. Raw Material Availability: the availability and cost of raw materials such as limestone, clay, and gypsum also play a crucial role.

Any disruption in the supply chain or increase in raw material costs can lead to higher production costs.

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The price hike in cement is likely to have a ripple effect across the construction industry.

Contractors and builders may need to adjust their budgets, and the increased costs could be passed on to property buyers and renters.

This situation might also slow down ongoing and planned construction projects, affecting the overall development pace in the country.

In addition to the economic implications, the rising cost of cement can also impact the affordability of housing.

Ghana already faces a significant housing deficit, and higher construction costs could exacerbate the situation, making it more difficult for many Ghanaians to afford decent housing.

The price you are seeing is exclusive of transportation and offloading.
then the retailer would add his/her profit.

95.5+3.5=99 plus profit of 3 cedis

102 … and I used the least amount in doing the calculation depending on your location, it could go higher.

This is not… pic.twitter.com/HhhJNG8ZdI

— Bee (@Bridget_Otoo) May 13, 2024

Industry stakeholders and government authorities may need to explore measures to mitigate the impact of rising cement prices.

Potential strategies could include subsidizing energy costs for cement manufacturers, improving transportation infrastructure to reduce logistical costs, and stabilizing the exchange rate to control import costs.

Additionally, encouraging the use of alternative building materials and promoting local production of raw materials could help stabilize prices in the long run.

In conclusion, the anticipated increase in cement prices to GHS 110 per bag represents a significant development with far-reaching implications for Ghana’s construction industry and overall economic landscape.

Stakeholders must closely monitor the situation and implement strategic measures to mitigate the impact on construction costs and housing affordability.

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