The million-dollar problem sitting offshore: Why Ghana’s cement makers are adding GH¢12 to every bag

Trouble is brewing offshore for Ghana's cement manufacturers, who are set to introduce a new surcharge on cement bags to cover mounting operational costs. The trouble stems from severe congestion at Tema Port, leading to skyrocketing costs. According to industry insiders, manufacturers are preparing to add GH¢12 per bag to cement prices due to extended clinker waiting times at the port.

The clinker, essential for cement production, is taking up to 40 days to clear the port, up from just seven days at the start of the year. Adding to the problem, daily vessel demurrage rates have soared to approximately US$27,000, with a single vessel idling for 40 days incurring over US$1 million in penalties. This issue is not just financial; the extended lead time for clinker to travel from China and wait at the port creates a structural bottleneck in the supply chain.

The industry emphasizes that the GH¢12 surcharge is temporary and directly passes the cost onto consumers, subject to quarterly review. If port operations improve, the surcharge can be removed. Beyond the immediate surcharge, stakeholders are calling for better coordination between agencies to tackle the port bottleneck. The surcharge aims to prevent foreign exchange drain, as demurrage fees drain capital meant for the Ghanaian economy into international ship owners.

Manufacturers are talking with government stakeholders, including Ministries of Trade, Agribusiness and Industry, and Transport, but they stress that port infrastructure and berthing availability remain a major challenge. The cement producers hope that collaborative efforts will resolve port congestion, eliminating the need for the surcharge.