Government moves to tame spiralling prices of building materials

Thursday November 25 2021
building

Paramedics try to reach people trapped in rubbles after a house collapsed in Makongeni, Nairobi on December 17, 2014. All building materials for property in Nairobi will now be subjected to testing by experts to verify their suitability before any construction work begins. PHOTO | NMG

By Rosemary Mirondo

Dar es Salaam. The government yesterday explained the reasons behind a rise in the prices of construction materials, and just as soon said it was taking five measures to contain further escalation.

Industry and Trade Minister Kitila Mkumbo said yesterday that the rise was largely due to challenges in distribution channels for cement, and a rise in demand for raw materials which are found in China for manufacturing steel.

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

Reports have it that construction costs have increased by 80 percent, and evaluation was 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 evaluation showed that prices of some products had risen illegally which led the government to come up with five measures to control the situation.

Explaining, he said the results of the assessment show that in the regions surveyed, the prices of cement have risen by an average of Sh1,000. The country has nine cement factories capable of producing 1,080,000 tonnes annually.

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

However, in the case of Ruvuma Region, cement prices dropped by 15 percent: from Sh17000 in September to Sh14,500 in November.

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

“Our evaluation shows that the price of gauge-28 iron sheets increased by 5.5 percent in Mwanza, rising from Sh31,700 in September to sh33,400 in November. In Dar es Salaam, the price increased from Sh28,000 in September to Sh29,000 in November this year.

With regard to steel, he said, Tanzania has a total of 16 factories that 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 tonnes annually.

“The evaluation shows that steel prices rose by six percent 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 the prices rose from Sh41,000 in September to Sh43,700 in November,” he said.

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

“Therefore,” Minister Mkumbo said, “in line with the illegal price increases for essential commodities in the country, the ministry will be providing monthly trends report on essential commodities in all the regions.

“This is to give consumers a better understanding of the realities of commodity prices so that they can take precautions and report to the relevant authorities for the necessary legal action against the culprits involved.

He said the Fair Competition Commission (FCC) has been directed to closely monitor the pricing processes, and to take appropriate legal action against traders who violate competition laws.

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

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