High cement prices worry private sector, Uganda

High cement prices worry private sector, Uganda
Published: 20 March 2008

Until the government intervenes in the soaring cement prices, players in the private sector are worried it may draw back the booming construction industry. 
 
Stakeholders want the construction policy in the offing to address this matter. The draft policy is currently at the ministerial level for final comments according to the Managing Director Uganda National Building and Civil Engineering Contractors (UNABCEC) Mr Paul Mwirumubi.  
 
At the moment those who are able to purchase a bag of cement have to dig deep into their pockets for the price has gone up to Shs30,000 ($17) from Shs20,000 around 2007 thus making Uganda’s cement the most expensive in Africa and worldwide.  
 
Yet about two years ago the same bag used to cost Shs13, 000.  
 
Mr Walusimbi Mpanga the Executive Secretary Uganda Services Exporters Association (USEA) said: "Cement is a raw material that deserves to be zero rated".  
 
He added: "In China a bag of cement costs $3 (Shs5, 100) this is not healthy for Uganda which is experiencing a construction boom of the different infrastructures like power dams, roads, and houses among others".  
 
The construction industry highly contributes to the creation of jobs in Uganda, something that has seen many people’s living standards improve. Last year’s Uganda Investment Authority records indicate that licensed projects in the construction industry were among the highest job creators rated at 4,588 jobs. 
 
However, the General Manager Hima Cement Mr David Njoroge in an interview with Daily Monitor about the matter said: "The cost of making cement is too high. The cost of power, transport and fuel is too high and the consequence is a high price of cement".  
 
He said: "If those three (power, fuel and transport) were to be addressed not only in Uganda alone but in Africa in general the price of cement would go down".  
 
During the previous financial year the industrial sector was bouyed by a positive of 13 per cent growth in the construction sector.  
 
Currently Uganda’s cement production is rated at about 1Mt capacity from both Hima (350,000) and Tororo (700,000).