Government takes steps to rein in soaring building material prices

By Rosemary Mirondo

Dar es Salaam. Yesterday the government explained the reasons for a rise in building material prices and immediately said it was taking five steps to contain a further escalation.

Industry and Trade Minister Kitila Mkumbo said yesterday that the rise was largely due to difficulties in cement distribution channels and an increase in demand for raw materials found in China for steelmaking.

“The ministry regularly monitors the production, distribution and prices of essential goods in the country, including food, sugar, cooking oil and building materials, but this time the report covers assessments made on the production, distribution and prices of building materials, especially cement. , iron sheets and steel during the period from September to November this year,” he said.

Reports indicate that construction costs have increased by 80% and an assessment has been conducted in nine regions that use the products the most, namely Dar es Salaam, Arusha, Dodoma, Kilimanjaro, Mbeya, Mwanza, Coast, Shinyanga and Ruvuma .

He noted that the assessment showed that the prices of some products had risen illegally, which led the government to come up with five measures to control the situation.

Explaining, he said that the results of the assessment show that in the areas surveyed, cement prices increased by an average of 1,000 shillings. The country has nine cement plants capable of producing 1,080,000 tonnes per year.

Advertising

“In the case of the Mwanza region, cement prices rose from Sh19,000 for a 50 kg bag in September to Sh20,000 in November. In Dar es Salaam, prices went from Sh14,000 in September 2021 to Sh15,000 in November this year,” he said.

However, in the case of the Ruvuma region, cement prices fell by 15%: from 17,000 shillings in September to 14,500 shillings in November.

He noted that for iron sheets, the country has two large factories and other small industries which together produce 14,949,703 feet of product per year: the equivalent of 200,000 28-gauge sheets which are commonly used in the country.

“Our assessment shows that the price of 28 gauge iron sheets increased by 5.5% in Mwanza from 31,700 shillings in September to 33,400 shillings in November. In Dar es Salaam, the price rose from Sh28,000 in September to Sh29,000 in November this year.

Regarding steel, he said, Tanzania has a total of 16 factories which have the capacity to produce 1,082,788 tonnes of various gauges including 16mm, 12mm, 10mm and 8mm.

However, currently, the factories produce an average of 750,000 tons per year.

“The assessment shows that steel prices increased by 6% between September and November this year. In Mwanza region, the price rose from Sh44,000 in September to Sh47,500 in November while in Dar es Salaam, prices rose from Sh41,000 in September to Sh43,700 in November,” a- he declared.

The government had come up with a measure to control the unpredictable rise in cement prices caused by the supply chain and not by rising manufacturing costs, which was not legal. The rise in the prices of basic products (steel, sheets) is due to the rise in the prices of imported raw materials whose local production is insufficient.

“Therefore,” Minister Mkumbo said, “in line with the illegal increases in commodity prices in the country, the ministry will provide a monthly report on commodity trends across all regions.

“It is about giving consumers a better understanding of the realities of commodity prices so that they can take precautions and report to the appropriate authorities the necessary legal action against the culprits involved.

He said the Fair Competition Commission (FCC) has been tasked with closely monitoring pricing processes and taking appropriate legal action against merchants who violate competition laws.

“We are also amending various laws and regulations to allow easy importation of raw materials needed to manufacture metal products, including allowing the importation of scrap metal in a way that would ensure the product is available in the country without affecting health. environmental,” he said.

He pointed out that the government has banned the export of scrap copper and copper ingots which are widely used in the production of various scrap products while, in the longer term, the government will implement projects that would enable the Tanzania to produce more metal products in the country for domestic use and for export.