Trade Minister Orders Cement Manufacturers to Obtain Licences or Cease Operations

The Minister of Trade and Industry, K. T. Hammond, has issued a firm directive to cement manufacturers across Ghana to secure operational licences or immediately cease production. This directive was addressed to the Cement Manufacturing Development Committee (CMDC), established last year to regulate the cement industry. The move follows the recent enforcement of the Ghana Standards Authority’s (GSA) Manufacture of

Read full articleCement Regulation, 2023 (L.I. 2480), which aims to tighten regulatory oversight on the sector, ensuring that all manufacturers adhere to the highest standards of quality and safety.

New Regulatory Framework The new regulation, which came into effect this year, mandates that all cement manufacturers, whether existing or new, must obtain a licence to operate legally. According to the regulation, all companies currently producing cement without a licence are considered to be operating illegally. Under Section 17 of L.I. 2480, the law states:

"A person shall not manufacture cement in the country unless the person has obtained a licence in accordance with these Regulations." Failure to comply with this provision could lead to severe penalties, including imprisonment ranging from 12 months to two years. Professor Alex Dodoo, Director-General of the GSA and Chair of the CMDC, revealed that none of the cement manufacturers in Ghana have yet applied for the required licences. This lack of compliance has prompted the minister to take decisive action to ensure that all players in the industry follow the new rules.

Enforcement and Compliance Since the regulation was introduced, the GSA has issued multiple public notices urging cement manufacturers to comply by re-registering their businesses and securing the necessary permits. The regulation also stipulates that new cement factories must apply for a licence before commencing operations. The Ministry of Trade and Industry, through the CMDC, will now begin enforcing these requirements.

Professor Dodoo stressed that the industry had long operated without proper regulation, and the new law seeks to address this gap by promoting higher standards of quality and environmental protection. Manufacturers operating in unapproved locations will be required to relocate to licensed, approved sites before obtaining a permit.

“The directive by the Trade and Industry Minister has become necessary due to widespread non-compliance. There is an urgent need to protect consumers by ensuring that only quality cement products are produced and sold in the country,” Professor Dodoo explained. “This new regulatory framework also focuses on protecting the environment and ensuring that the industry operates in an organised manner.”

Ensuring Quality and Environmental Protection The GSA Director-General emphasized that the Manufacture of Cement Regulation, 2023, was designed to safeguard the interests of consumers by enforcing quality assurance protocols, particularly in light of the rising cost of cement, which currently averages GH¢105 per bag. The law also seeks to ensure that cement factories operate in approved locations that meet environmental safety standards.

Additionally, the GSA has a key role in reviewing and recommending licensing procedures to the Trade Minister. The L.I. 2480 framework provides for an all-inclusive oversight mechanism that ensures transparency and accountability within the industry.

Licensing Process To secure a licence, Section 18 of the regulation requires that any person or company seeking to manufacture cement must apply to the Trade Minister in writing, using a prescribed form. The application must be accompanied by the appropriate fee and meet all the regulatory requirements for quality and safety.

“This process will ensure that existing cement manufacturers meet the required standards, and if any gaps are identified in their operations, they will be given time to rectify them,” Professor Dodoo added. The CMDC, under the oversight of the Trade Minister, will take swift action to ensure that all manufacturers comply with the new regulations.

Background and Rationale for the Regulation In recent years, the Ghana Standards Authority, working with the Ministry of Trade and Industry and law enforcement agencies, has intensified efforts to combat the production of substandard cement. This crackdown has revealed several issues, including the unauthorized use of the GSA certification logo and the operation of cement factories without proper permits. Last year, three companies in the Ashanti Region were shut down after it was discovered they were using substandard raw materials in their cement production.

As part of its broader initiative, the Ministry of Trade and Industry issued a directive halting the establishment of new cement factories in Ghana until the new regulation came into force. Professor Dodoo noted that the absence of clear regulations had allowed some firms to exploit the system, producing substandard products that compromise quality and safety.

The new licensing requirements, along with the committee’s enforcement efforts, are aimed at eliminating such practices and bringing order to the cement manufacturing industry. By ensuring that all manufacturers adhere to the law, the ministry hopes to create a more competitive and responsible sector.

Next Steps With the enforcement of L.I. 2480 now in full swing, the CMDC will begin taking the necessary measures to ensure compliance. Existing manufacturers will need to re-register and meet the regulatory standards, while new entrants into the industry will be required to apply for licences before starting production.

Professor Dodoo assured that the committee would remain vigilant in its oversight and continue to work closely with the Ministry of Trade and Industry to bring much-needed transparency and order to Ghana’s cement industry. Manufacturers failing to comply with the new regulations could face severe consequences, including fines and imprisonment.

This regulatory shift marks a significant step forward in promoting consumer protection, environmental sustainability, and quality assurance within the cement manufacturing sector in Ghana.