Mozambique investigate 'dramatic' rise in the price of cement

Byyyp

Updated Wed, 17 Oct 2012 00:00:00 GMT

The Mozambican government's National Economic Activities Inspectorate (INAE) is investigating cement wholesalers and retailers in the northern province of Nampula, after recent dramatic increases in the price of cement. The move is attempting to halt the hoarding of cement and its subsequent resale at speculative prices on the informal market.

The investigation is examining why a 50kg sack of cement produced at a plant in Nacala is being resold at a 66% mark-up in the provincial capital of Nampula city. A government decree from November 2011 fixed the maximum profit margin at 12% for wholesalers and 25% for retailers.

However, wholesalers and retailers in Nampula have claimed that the prices cited by the INAE are unrealistic because of the high transport costs involved in moving cement from Nacala to Nampula. According to the wholesalers and retailers, waiting times in Nacala also contribute to the cost. Trucks sometimes wait outside the cement factory for seven days before they are loaded, suggesting that the plant in Nacala is unable to cope with the demand.

Nacala has two cement plants but only one supplies the market. The other sells its cement directly to the contractors building major public works in the Nampula province.