Mozambique cuts cement tax as costs soar

Mozambique has suspended a 10.5 percent tax on cement imports for the next two years to counter rising building costs, a government official said on Thursday. Cabinet spokesman Luis Covane, said local industry was not producing enough cement to meet demand, resulting in prices soaring and that this has serious implications for the government’s public works programme," Covane told Reuters. Covane said national cement production covered 80 per cent of the needs in the south of the country, 70 per cent in the central provinces, and only 60 per cent in the north.

One cement factory in the northern port of Nacala is not producing and Covane said the situation could deteriorate if measures were not taken to ensure imports at a reasonable price. A 50kg bag of cement in northern parts of Mozambique costs US$25 compared to US$11.2 in Maputo.

Mozambique traditionally has bought cement from South Africa, but a boom in that country’s construction industry ahead of the 2010 soccer World Cup may force Mozambique to import cement from further afield. Mozambique, one of the world’s poorest nations, is battling to find money to rebuild its dilapidated education and health-care system, as well its road network, which was neglected during a 17-year civil war that ended in 1992.