Cement price caps come in to effect in Addis
Regions, Zones said to follow suit
The Ministry of Trade and Regional Integration (MOTRI) and Cement Manufacturers’ Board (CMB) announce retail price caps on cement.
The price implementations are said to be effective starting from January 30, 2023 with prices varying in for regions and city administrations but well within or less than the 1200 birr per quintal point.
Since the highest demand is in Addis Ababa, the board has set different retail prices for various cement brands. For instance, Dangote Cement – Birr 1,106.85 per quintal; Derba Cement – 1,067.33 per quintal; Capital Cement – 1,052.25 per quintal; and Kuyu Cement – 1,065.25 per quintal. Cement prices for Regional States and Zones are said to be made public in the near future.
In its most recent effort to reduce the cost for end users, MOTRI disclosed that it will regulate cement gate prices set from December 22, 2022, for the next six months. This most recent attempt at market stabilization follows actions like establishing fixed consumer pricing, restricting individual purchaser sales quantities, and requesting producers to eliminate wholesalers from the supply chain. MOTRI admitted that recent control measures had made the situation worse and increased the number of illegal traders instead. The government now intends to reduce its interaction in the cement market. A couple of weeks back, it can be recalled that on December 22, 2022, the ministry had issued a factory gate price which brought the price of one quintal of cement from 750 birr to 795 birr.
The country has suffered from a cement shortage since 2020 due to low domestic production levels. This has been exacerbated by security issues, a lack of raw materials and a shortage of foreign currency. Expansions of existing factories, coming new companies in the sector is expected to stabilize the market, according to the Board .As indicated on the press conference, Government projects are getting 30 percent of production from every factory and real-estate developers can also get cement directly from factories.