In response to rapidly increasing cement prices in the country, government has instructed cement manufacturers to cut prices before mid May this year, or else face competition from cheaper foreign manufacturers.
The decision was reached after a meeting on Tuesday held between Minister of Trade, Industry and Cooperatives, Amelia Kyambadde and cement manufacturers and wholesalers with an intention of establishing the cause of the increasing cement prices and devise possible solutions.
A bag of cement currently costs between Shs 40,000 and Shs 43,000 in most wholesale shops up from the month of February, when it cost around Shs 32,000.
Hima Cement attributed the price increase to the shortage of clinker (raw material for making cement) now held at the border by the tax body Uganda Revenue Authority (URA), but the Ministry promised to fast track its clearance so as to increase production.
On wholesalers who raise prices to exploit consumers, government has threatened to place a price cap on them to ensure price stability. Power outages was another reason fronted by manufacturers which they say limits production of cement to which the Ministry promised to liaise with UMEME to sort out the problem.
It has also been agreed that the Ministry of Trade works with Ministry of Energy to fast track the mining license for limestone for Hima Cement and champion the removal of 10% import duty on clinker in order to lower costs of cement production in the country.
Cement manufacturers who attended Tuesday’s meeting committed in writing to double their supply of cement in the next 3 weeks. However, the Ministry resolved that it will open up and allow importation of cement at a special duty rate in case the prices remain high by mid May this year.
The recent sudden hike of cement prices in the country caused public outcry with many calling on government to intervene. It remains unclear whether the decisions reached will normalize the situation soon.