Categories: Stories

Why Zimbabwe is facing a shortage of cement

Zimbabweans can now freely import cement, the government says, a response to a doubling of prices caused by surging demand and depressed local production.

Cement prices are rising due to a combination of factors; plant breakdowns and scheduled maintenance at the country’s major cement producers plus the expiry of import licences. All this has happened at a time of record high demand.

“The nation is advised that following reports of artificial cement shortage in the market and the spiralling prices cabinet has approved the importation of cement by individuals and companies with free funds,” cabinet said yesterday.

Until December, each individual and company can import a maximum of five tonnes of cement.

Cement producers for years lobbied the government to limit imports, saying they could not compete with cheaper imports given the high cost of production at home. 

In 2021, the government gazetted Statutory Instrument 89 of 2021, which restricted foreign cement by issuing import licences. Many of these licences have since expired and the government had been reluctant to renew them, causing a shortage.

The high prices threaten to stall public infrastructure projects and house construction, which have driven a construction boom and helped prop up sections of the economy.

Due to government infrastructure projects and home builders, cement consumption has been rising over recent years. Cement consumption increased from below one million tonnes in 2017 to around 1.6 million tonnes this year, according to estimates by PPC, the country’s biggest producer.

In total, cement companies have a capacity of 2.6 million tonnes of cement, which should meet current demand. However, production costs and plant breakdowns are keeping them from producing enough cement.

PPC’s cement sales grew by 42% in the first five months of this year, as the company recovered from a plant maintenance shutdown last year.

PPC has a capacity of 1.4 million tonnes of cement per year at its locations in Harare and Bulawayo, and controls just over 60% of the market, according to industry estimates.

Continued next page

(239 VIEWS)

Page: 1 2

Charles Rukuni

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

Recent Posts

Reserve Bank of Zimbabwe expects more foreign currency sellers to join the interbank market

The gazetting into law of the payment of quarterly taxes on a 50-50 basis in…

December 4, 2024

Zimbabwe 2025 citizens’ budget

Zimbabwe has today unveiled a ZiG276.4 billion budget for 2025 during which it expects the…

November 28, 2024

To go or not to go- Mnangagwa in a quandary

Zimbabwe President Emmerson Mnangagwa has repeatedly stated that he is not going to contest a…

November 25, 2024

ZiG loses steam, falls against US dollar for five consecutive days

The Zimbabwe Gold fell against the United States dollar for five consecutive days from Monday…

November 22, 2024

Indian think tank says Starlink is a wolf in sheep’s clothing

An Indian think tank has described Starlink, a satellite internet service provider which recently entered…

November 18, 2024

ZiG firms against US dollar for 10 days running but people still do not have confidence in the currency

Zimbabwe’s new currency, the Zimbabwe Gold (ZiG), firmed against the United States dollars for 10…

November 16, 2024