Saving the construction industry

The market forces are at play, dictating the real value of goods and services in the liberal economy.

Despite a turbulent economic environment, both at the global and the national levels, the government has tried to stabilise the economic indicators in order  to not distort the economy.

This tight balance has been very difficult to maintain, but the government’s economic management team is soldiering on to achieve its objectives.

The situation appears somehow scary in recent times, with rising prices of goods and services. Interest rates are high, inflation is rising and the cedi continues to depreciate against the major currencies.

Since the cedi began the free fall against all major currencies, there has been a problem with maintaining stable prices for goods and services on the market.

Reports indicate that most business concerns budgeted with an exchange rate of GH¢2.50 to one dollar by year end 2014 but before the middle of the year the exchange rate was in the region of GH¢3 to the dollar.

The end result of the behaviour of the cedi is the bleeding of the balance sheets of businesses and household budgets.

Quite recently, the Bulk Oil Distribution Companies (BDCs) complained of huge government indebtedness to them as a result of the subsidy regime and the fall of the cedi.

There are fears that if the trend continues, there will be a housing bubble very soon, as the incomes of the people, including even those in the upper class, cannot sustain the industry because of the rising cost of building materials.

At present, a bag of cement sells at GH¢35 on the open market but GHACEM, in a notice in the media yesterday, gave a recommended end-user price, inclusive of 17.5 per cent VAT/NHIL, of a minimum GH¢30.

We cannot rule out panic buying by developers as they struggle to get cement to undertake all kinds of projects.

The boom in the construction industry, including the building of roads, can only be sustained by a vibrant cement industry that can supply the needs of the sector.

This sector employs many people whose continued employment depends on the availability of cement and other building materials.

The Daily Graphic is happy that at a time of the apparent shortage of cement on the market, another investor, the Addoha Group of Morocco, has established Cimaf Ciments de L’Afrique, which has set up a cement factory in the Free Zone Enclave to complement the activities of existing cement manufacturers.

We add our voice to the hope expressed by President John Mahama at the sod-cutting ceremony that the completion of the project would help stabilise the price of the product on the market.

The problem of the construction industry cannot be isolated from the general economic malaise in the country.

The Daily Graphic thinks to resolve the challenges in the construction industry, the government ought to take pragmatic moves to put the economy on an even keel.

The reality of our time requires urgent action to save the ship of state and put smiles on the faces of the people once again.