The construction industry in Zimbabwe is facing a major crisis due to a sudden and significant increase in cement prices, which spiked by over 42%. A bag of cement, previously around $11, now sells for between $17 and $20.
Key Findings and Causes:
The shortage and price increase are attributed to a combination of factors affecting supply:
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Soaring Demand: Building activity across the country has surged, pushing demand for construction materials beyond anticipated levels.
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Local Production Shortfalls:
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Raw Material Scarcity: Major producers like PPC are struggling with a short supply of clinker, a critical raw material.
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Operational Issues: Companies like Tukaya Cement (formerly Lafarge) are facing production bottlenecks due to financial constraints and obsolete machinery.
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Power Cuts: National power outages are severely disrupting the manufacturing process.
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Import Constraints: Restrictions and quotas on cement imports have limited foreign supply. Additionally, available imported cement is being held up at the border awaiting clearance.
Market Situation:
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Big Wholesalers (e.g., Mohammad Musa, Bowa Hardware) listed prices around $15.00 but were largely out of stock.
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Smaller Hardware Stores had stock but were selling it at the higher price range of $17 to $20.
Government Response:
To address the severe crisis, the Government of Zimbabwe has taken immediate action by lifting the ban on cement imports to allow new supply to enter the market.
