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Govt bitter over price and supply of cement
2007-12-17 09:14:15
By Judica Tarimo
Dishonest dealers are the major cause of the continued skyrocketing of the retail price of cement despite the measures taken by the government to stabilise the product`s domestic market, a deputy minister has said.
The measures include a ban imposed on the exportation of the commodity, according to Industries, Trade and Marketing deputy minister Hezekiah Chibulunje.
Speaking in an exclusive interview with this paper in Dar es Salaam at the weekend, Chibulunje expressed bitterness over the situation and promised to take ``appropriate action`` against all concern.
Sources said cement dealers have been on a deliberate hunt for super profits at the expense of customers, often employing multiple exploitative strategies to realise their goals.
Following an acute countrywide shortage of cement, the government recently adopted a mix of measures to stabilise the domestic market, banning exportation and opening the doors to imports from elsewhere in East Africa.
Among other things, the intervention was aimed at keeping in check the skyrocketing prices triggered by the shortage.
However, a recent survey shows that the government`s intervention has not induced any significant cuts in the price or improvements in the supply of cement.
Instead, the retail has price risen appreciably and now stands at between 20,000/- and 22,000/- per 50kg bag compared to 15,000/- on average before the ban in Dar es Salaam.
The prices are even higher in most upcountry stations.
``The government took appropriate measures to improve prices and stabilize the domestic market for this vita1 construction item. It is sad and intriguing that not much of a trickle-down effect is felt by customers, and the main cause are dishonest cement dealers,`` noted the deputy minister.
``These dealers have opted to retain high prices without any reason whatsoever just because they have decided to create an artificial shortage in their quest to maximise profit in complete disregard of a public outcry,`` he added.
Chibulunje said the current wholesale ex-factory price for a 50kg bag of cement ranges between 12,000/- and 13,000/-, and hence his description of the running retail prices as ``completely unjustifiable``.
``The wholesale prices are greatly at variance with what the retailers charge. The dealers are driven by greed for super profits and the government cannot tolerate this,`` he pointed out, adding that thorough scrutiny would be conducted so that all dishonest dealers face legal action.
The government had banned the exportation of cement and allowed in imports as part of a deliberate strategy to protect customers, he said, wondering why retailers should be reluctant to cooperate with the government and industry stakeholders for the benefit of wananchi.
The serious scarcity of cement in the country in recent months is largely attributed to massive exportation of the product to neighbouring countries like Botswana, Democratic Republic of Congo (DRC), Malawi and Zambia but also to as farther away as South Africa.
The sudden shortage initially triggered a rise of the price of cement from 12,000/- to 15,000/- per 50 kg bag in a matter of one month.
The situation attracted a nationwide outcry that forced the government to chip in with solutions to the market stabilisation initiatives that retailers have been ignoring or evading with relative ease.
Some dealers have openly disagreed with the government`s control measures, describing them as uncalled-for in present-day conditions where prices of most commodities are determined by market forces.
However, Industries, Trade and Marketing minister Basil Mramba is not impressed and recently stated: ``Having an open market regime does not mean people doing whatever they want.
The government must intervene and, in this particular case, we are forced to intervene and stabilise cement marketing and protect customers.``
Still, it is unclear what measures the government will adopt this time around to rein in exploitation by unscrupulous dealers turning the skyrocketing of cement prices into a permanent feature of the national economy.
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