Franklin Cudjoe Warns of Legal and Economic Risks in Cement Price Control Legislation
Franklin Cudjoe, President of the think tank IMANI Africa, has issued a stern warning regarding the government’s proposal to introduce price controls in Ghana’s cement industry.
In a letter to Majority Leader Alexander Afenyo-Markin, Mr Cudjoe raised significant legal, economic, and practical concerns, cautioning that such measures could result in constitutional challenges and economic inefficiencies.
He emphasized that the Ghanaian Constitution, particularly Article 36, enshrines the principle of free trade and market-driven pricing, which could be undermined by legislative interference in the cement market, warning that attempts to enforce price limits through a Legislative Instrument (LI) could trigger lengthy legal disputes, potentially overturning the regulations in court.
“It may be argued that adopting a legislative instrument to regulate prices capriciously violates fundamental constitutional rights,” he wrote.
In addition to domestic legal concerns, Mr Cudjoe pointed to Ghana’s obligations under international trade agreements, including those overseen by the World Trade Organization (WTO). He warned that price controls could breach these accords, risking sanctions and damaging the country’s global trade relations.
Mr Cudjoe also addressed the economic impracticality of the proposal, noting that cement prices are influenced by global market forces, including input costs and exchange rate volatility. He stressed that regulating prices ignores these dynamics and could distort market signals, dissuading investment and leading to potential shortages.
The IMANI Africa president therefore advocated for competition-driven reforms instead of price controls, suggesting that increased market competition and regulatory oversight would be more effective in stabilizing prices. He also called for targeted subsidies or incentives to ease cost pressures on producers without disrupting the free market.
“Legislation of this nature risks creating inefficiencies, hindering innovation, and reducing the competitiveness of Ghana’s cement industry both domestically and internationally,” he observed, urging lawmakers to reconsider the proposal.
