IMANI Centre for Policy and Education has published a policy brief urging government to recalibrate interventionist approaches in the cement and liquefied petroleum gas sectors to balance public interest with market efficiency and preserve Ghana’s investment appeal.
The brief examines two regulatory frameworks that sparked controversy among industry stakeholders: the Cement Pricing Regulation under Legislative Instrument 2491 and the Cylinder Recirculation Model governing LPG distribution. Both policies aim to address legitimate concerns about affordability and safety but risk unintended market distortions according to the analysis.
Ghana’s Economic Freedom Index score stood at 55.8 in 2024, placing the country 104th globally in the Heritage Foundation rankings within the Mostly Unfree category. The score represents a steady decline since 2020 as state interventions increased across various economic sectors.
The World Bank’s 2024 Business Ready Report scored Ghana just 32 out of 100 on competition safeguards, reflecting persistent structural and regulatory challenges limiting fair and open market dynamics. The country performed better in areas including labor practices at 69, utility services at 74.48, and business insolvency at 65.
IMANI researchers found that over 80 percent of cement production costs are denominated in US dollars, primarily for imported clinker, making price controls impractical amid sustained cedi depreciation. Between 2022 and 2024, retail cement prices rose only 24 percent while the currency weakened 63 percent, indicating producers absorbed costs rather than inflating prices.
The policy brief warns that rigid price controls could trigger supply shortages or drive producers to downgrade cement quality from higher grade 42.5R to lower grade 32.5R specifications. Such degradation would undermine structural integrity in construction projects with serious long term safety implications for buildings and infrastructure.
The Chamber of Cement Manufacturers Ghana and Ghana Real Estate Developers Association criticized inadequate consultation before enactment of pricing regulations. Industry representatives complained their technical expertise and market knowledge were sidelined during policy formulation, undermining regulatory legitimacy and compliance prospects.
For the Cylinder Recirculation Model, IMANI documented stark disparities in LPG access with urban usage at 36.4 percent far outpacing rural adoption of just 7.1 percent. The model’s rigid exchange requirements and high transition costs risk excluding small retailers who invested substantially over decades in traditional refill infrastructure.
Average LPG prices of 12.60 Ghana cedis per kilogram in 2023 stood nearly five times higher than charcoal at 2.84 cedis per kilogram. Without subsidies or flexible distribution methods, the brief warns that the Cylinder Recirculation Model could worsen energy poverty by pushing low income households toward cheaper polluting fuels.
The Ghana LPG Operators Association and LPG Marketers Association of Ghana highlighted the absence of memoranda of understanding with the National Petroleum Authority, weakening stakeholder engagement on model implementation. Associations also noted that local government entities capable of community level monitoring and awareness were excluded from initial rollout plans.
IMANI identified competition risks in both sectors, noting concerns that the Cylinder Recirculation Model potentially favors dominant bottlers including Blue Ocean and Sage Petroleum while risking monopolistic behavior. Cement pricing controls similarly may entrench larger producers despite 14 firms already competing if smaller companies lose market share due to regulatory impacts.
The policy brief assessed alignment with free market principles, finding the Cement Pricing Regulation scored low due to anti competitive concerns and potential harm to investor confidence. The Cylinder Recirculation Model received moderate alignment because it maintains some private sector participation and operational flexibility with traditional refill stations.
Ghana attracted 649.58 million US dollars in foreign direct investment during 2023, creating 13,523 jobs when projects reach full capacity. However, IMANI warns that sector specific interventions threaten appetite for future investment inflows by creating regulatory unpredictability and compliance burdens.
The brief recommends revising cement pricing regulations to emphasize transparency and predictability rather than rigid controls. Proposed reforms include establishing a joint monitoring body comprising the Ministry of Trade and Industry, Ghana Standards Authority, manufacturers, developers and civil society to conduct quarterly reviews of cost indices.
IMANI suggests replacing monthly reporting requirements with quarterly submissions to reduce administrative pressure on both manufacturers and regulators. The think tank advocates institutionalizing a Policy Dialogue Forum with pre legislation engagement mandates and post implementation feedback mechanisms to recalibrate interventions based on market realities.
For cement manufacturers, the brief recommends encouraging private risk hedging tools including forward contracts, currency swaps and commodity futures to manage foreign exchange volatility rather than relying on state sponsored buffers that risk market distortion. Such financial instruments would allow producers to lock in clinker prices and protect against cedi depreciation independently.
On Cylinder Recirculation Model implementation, IMANI proposes mandating clear integration pathways for qualified pre existing LPG retailers with right of first refusal for operators in underserved areas. Legacy members of the Ghana LPG Operators Association should receive priority to operate exchange points subject to meeting basic compliance standards.
The policy brief calls for standardizing margin structures to incentivize marketers with extended operations in rural areas, increasing LPG access in northern and peri urban districts. Consumer protection measures should include one time acquisition subsidies or deferred payment options for low income households through social protection platforms.
IMANI recommends publishing a comprehensive risk classification manual detailing methodologies, indicators and thresholds for rating LPG stations to remove regulatory ambiguity. Clear procedures would set expectations before inspections or reclassifications occur, building operator confidence in fair treatment.
The brief proposes requiring all Cylinder Recirculation Model participants to file and publicly disclose affiliate networks including ownership interests and contractual arrangements. Such transparency would address concerns about vertical integration by major players operating bottling plants, bulk distribution companies and retail outlets simultaneously.
An independent appeals mechanism within the National Petroleum Authority would allow operators to challenge adverse decisions including license revocations or downgraded ratings through transparent resolution processes. This accountability measure would demonstrate that regulators remain subject to oversight and procedural fairness requirements.
In November 2025, National Petroleum Authority Chief Executive Godwin Kudzo Tameklo announced that Cylinder Recirculation Model implementation would proceed without undermining existing investments in refill stations. He emphasized concurrent operation of both models to safeguard investor confidence and maintain that public policy must not collapse long standing private investments.
IMANI argues that the preferred approach combines transparent safety benchmarks with independent oversight mechanisms and household financing schemes to make the model more accessible. Incorporating LPG adoption targets into district development plans would enhance effectiveness particularly for vulnerable communities.
The policy brief emphasizes that reforms remain feasible because Ghana can build on existing institutional frameworks at the Ghana Standards Authority and National Petroleum Authority while complementing them with participatory dialogues and regular impact assessments. Strengthening localized enforcement with practical financing mechanisms would improve ground level implementation.
Beyond feasibility, proposed reforms promise significant benefits including enhanced investor confidence through reduced policy unpredictability and closer alignment with African Continental Free Trade Area trade liberalization principles. Integrating small and medium enterprises into value chains would safeguard jobs while stronger legal enforcement coupled with targeted subsidies would stabilize systems for investors and consumers.
The brief warns that failure to recalibrate these interventions could further weaken Ghana’s private sector driven growth model and fuel uncertainty for future investments. Policymakers face pressure to demonstrate commitment to evidence based regulation that protects consumers without undermining market competition or deterring capital inflows.
IMANI’s analysis contributes to broader debates about appropriate government roles in strategic economic sectors during periods of macroeconomic stress. The organization positions regulatory reform as essential to preserving Ghana’s reputation as a stable democracy and attractive investment destination amid regional competition for foreign capital.
