A policy shift from tight state control to market liberalisation may sound like progress for Ghana’s cement sector; however, IMANI Center for Policy and Education warns it is not a silver bullet for lowering prices.
IMANI argues that the current government’s shift to a supply-driven approach, which involves lifting import restrictions and encouraging more production, risks oversimplifying a deeply structural problem.
Under the previous administration, state intervention dominated the sector, culminating in measures like L.I. 2491, which required manufacturers to declare prices monthly and submit cost breakdowns to the Ghana Standards Authority.
While intended to protect consumers, IMANI describes the approach as excessive micromanagement that edged into price-fixing.
However, under the current regime, the approach has taken a different turn. The government is betting on liberalisation, which is reopening factories and boosting supply, as the pathway to cheaper cement.
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IMANI explains that the government is assuming that the more supply there is, the more competition there will be, and that will push prices down.
However, the think tank believes the reality is far more complex. In its latest criticality analysis, IMANI emphasized that the cement market is already dealing with a surplus of about 1.4 million tonnes.
In practical terms, this means there is already more cement available than the market demands. Adding even more supply, therefore, does little to influence prices. This is an indication that volume is not the problem; rather, cost is.
“The policy direction has pivoted toward liberalization. However, shifting from an interventionist state to a purely supply-focused model carries its own set of flaws,” the think tank indicated.
According to the analysis by IMANI, for builders, contractors, and ordinary Ghanaians trying to put up homes, cement prices are not just shaped by how much is available. However, they are influenced by how much it costs to produce each bag, and those costs remain stubbornly high.
At the centre of the issue are structural bottlenecks that continue to inflate production expenses. Delays at Ghana’s ports, inefficiencies in handling cargo, and prolonged vessel wait times to offload clinker, the key raw material for cement, are all adding layers of cost before production even begins.
These operational gridlocks ripple through the entire value chain, ultimately landing on the consumer.
IMANI explains that, “Supporters of the current regime argue that lifting import bans and reopening factories will automatically drive prices down because of the increased supply. Yet, basic economics in the manufacturing sector dictates otherwise. Adding more volume to a market that already has an excess supply of 1.4 million tonnes does nothing to reduce the core cost of manufacturing a bag of cement.”
Even if factories run at full capacity and imports increase, IMANI insists that prices may remain elevated if these underlying inefficiencies persist.
It further challenges a widely held belief in policy circles that macroeconomic stability and increased supply alone can deliver price relief. While a stable currency and controlled inflation help, they cannot offset the cost pressures created by logistical and structural constraints.
The think tank is therefore urging the government to broaden its focus beyond supply expansion and tackle the deeper inefficiencies embedded in the system.
“If structural bottlenecks like massive port inefficiencies and vessel delays in offloading clinker are left unaddressed, macroeconomic stability alone won’t reduce prices any further. You cannot achieve lower retail prices merely by increasing volume if the base cost of every unit remains artificially high due to operational gridlocks,” the think tank recommended.
Without reforms at the ports and along the supply chain, liberalisation risks becoming what can be described as an illusion of protection; a policy that promises relief but fails to deliver it where it matters most.
IMANI maintains that increasing supply may improve availability, but without fixing the cost structure, affordability will remain out of reach.
