Over the past couple of months, local cement manufacturers in the nation have greatly expressed concern over unfair competition by foreign producers, particularly Nigeria’s Dangote Cement.
Complaints directed to the government include that the activities of the foreign companies on the market makes their operational cost very unfavorable.
One of the country’s leading cement producers, Diamond Cement Company recently revealed that regardless of its 1,000 workforce it has been able to utilize only 43% of its production capacity and as a result have been forced to lay off a good number of its staff with plans to lay off as much as 50% should the operational difficulties continue.
“Just last month, I was compelled to sack 10 people from the marketing department in Tema because I couldn’t sustain the company’s operations.” Said Diamond Cement’s General Manager Tati Ramarao.
He continued; “Since I am running at a loss, I cannot continue to keep the marketing staff in the company. Whatever decision that we decided to take has been and that is exactly what we will be doing.”
However, he paused to apologize for the company’s decisions saying; “Actually we are so sorry with the decision to sack people home but we have no other option.” Tati Ramarao also criticized the Trade Ministry for their lack of commitment towards putting the issue to bed, saying;
“We are suffering a lot even though we have written several letters to the Ministry of Trade. There have been promises but we have seen nothing from the state. There is neither implementation nor action at all; the situation is the same and the competition keeps getting worse,”
Amidst the ongoing outcry by the local cement manufacturers, the Trade Ministry recently allowed Fujian, a Korean cement company to export 500,000 tonnes of cement to the country.
While the decision was heavily criticized by local producers, it was on other hand supported by the importers association and some consumer interest groups who said it will help to curb monopoly in the sector.
The Trade ministry also defended their decision stating that the local produce didn’t meet up with the nation’s demand.
DCC, GHACEM, alongside other local manufactures have called on the government to probe the activities of Dangote Cement who sell their bagged cements below the competitive prices.
At the GBC’s Encounters held last week, President Mahama made comments on the matter noting that Nigeria’s Dangote is able to Trade on its grounds under the Ecowas Trade Liberalisation Scheme (ETLS) which permits exportation of finished goods among member states.
However, he promised his government will ensure Dangote Trades fairly should the probe carried out by Ghana International Trade Commission conclude otherwise.
The Presidents Spoken Speech Reads;
“We’ve received a complaint from the local cement producers saying that the entrance of Dangote Cement is affecting them and that Dangote is selling at prices that are below competition. … Now we’ve passed the Ghana International Trade Commission [bill] which is the body responsible for such complaints and so the matter came to cabinet, we’ve discussed it and then we’ve asked the trade minister to put it before the Ghana International Trade Commission … so I’m sure the first complaint they’ll get is on cement and what they’ll have to do is to find out what makes Dangote able to sell below competition. Is it that they are getting some subsidies in Nigeria, which is the accusation our cement manufacturers are making? … Or they are being given some tax waivers that our producers here don’t have?
“I don’t have that information and so the right body to investigate is the Ghana International Trade Commission … and if it is found that Dangote is being subsidised by the Nigerian government … or they are being given some waivers that make them more competitive and able to sell lower, then we might have to adjust the tariffs on their cement to reflect that and improve the competition between us. … We cannot stop the competition because of the ETLS but we must make sure they are playing by the rules so that they don’t have an unfair advantage over our people.”