Tuesday, January 28, 2014

How Many Bags of Cement Can Build a Standard Single Room?

In Ghana, a standard single room must be approximately 14 by 14 feet and comprise a toilet, a bathroom, a kitchen, and in some rare cases, a porch.

To embark on building such a structure, one must first take into consideration the building materials and their costs. For instance, the number of bags of cement required for the work, plywood, the volume of sand, and the labour force or workmanship.

Cement is the main building material needed to mould the blocks, and therefore the need to calculate how many bags would be needed for the entire work – the types of blocks to be used at the different levels of the building process –6-inches size blocks specifically for the foundation, and the normal 5-inches for the building itself including, the wall blocks, the concrete work at the lintel level, plastering and flooring.

According to a professional building constructor, Mr. Edward Akabutu of ASLOM Construction Company, a total number of 150 bags of cement would be needed for the construction of a standard single room, prefiguring the total amount for the purchase of the cement alone to GH¢3,000.00 ($1,500.00). This is no small money for an average working Ghanaian, who earns just over GH¢3,000.00 ($1,500.00) annually.

The price of a bag of cement has not been stable over the few years in Ghana, and based on current prognostications, it may take a while before we see depreciation of prices.
Nonetheless, most people in Ghana are still eager to become proprietors. Nowadays, house is as precious as ‘gold.’ There are three principal reasons, which explain people readiness and willingness to rather build or own a standard single room than renting a 2-bedroom house.
  1. To beat rental charges - Taking the opportunity of price instability as an excuse, landlords/landladies are in the habit of not only increasing their rental charges every so often, but also charging exorbitant rents for low-quality houses. Some of them go as far as taking a 5-year advance payment from their unsuspecting tenants. Today, a standard single room in Accra is between GH¢150.00 ($ 68.20) and GH¢200.00 ($91.10) per a month. Owning a single room apartment is therefore, one smart way that could save one from financial hardships.
  2. Peace of mind - Some landlords/landladies have taken the frequent price increment as an excuse to harass – and even suppress –their tenants in many unnecessary ways. House owners’ enmity does nothing but to trigger frustration and depression that would never be experienced when one lives in their own house.
  3. Extra Passive Income & Making Ends Meet - Being a proprietor of a single room apartment in Ghana may be the ultimate option for the average Ghanaian and would be considered a greater feat. If building a house is a huge investment, it is also seen as a great financial relief for owners of such proprieties and a sign of independence and maturity. Regardless of the economic hardship in the country, these house owners are sure to get something in their pocket at the end of the month.

Despite the sort of comfort it brings, the single room is surely not recommendable to everyone, and certainly not to a large family. If, for lack of space, a single room-house is an encroachment of individual privacy, there could be health implications such as the easy passage of communicable diseases from one person to another.

The building of single rooms may be a choice of lifestyle for some average Ghanaians or a short term shelter for others, such structures cannot be the definite solution to the country’s perennial acute housing deficit. Ghana’s population is increasing rapidly and more and more people from the rural areas are moving to the cities. Encouraging such buildings could further worsen Ghana’s already existing serious housing problem, leading to shanty towns. It is obvious that shanty towns tend to further develop into slums, causing dreadful implication on the people’s welfare and the country’s economy in general.

No serious entrepreneur or foreign governments would want to make any investment in a country with poor settlement plans. Hopefully, lawmakers take note of and act upon this.

Wednesday, January 22, 2014

The Cost of a Bag of Cement in Ghana within the Last 3 Years

Cement is the most commonly used building material in Ghana. Many commodities, goods and services including petroleum products, have seen price hikes over the years with cement not being an exception. The price of cement within the last three years has been increased by almost 120%, causing controversies.

In 2011, a bag of cement was sold at GH¢15.00 ($6.35) and saw a dramatic increase to GH¢17.00 ($7.20) in the following year. The price then shot up to GH¢18.00 or $7.63 in 2013. Today, a bag of cement is sold at GH¢19.00 ($8.10) or even at higher price, depending on the shop from where it is being bought. Unfortunately, with the recent increase in petroleum products, the price of cement is equally likely to climb to GH¢25.00 ($10.63) by the end of January.

If fuel price instability is the main cause of the price increase in cement in Ghana, certainly there are other factors that can be cited, explaining the volatility in the cost of cement.
  1. High In Demand - Being the most commonly used building material; cement is much patronized in the construction industry in Ghana. Unfortunately, GHACEM, which is Ghana’s leader in cement production does not have proper infrastructure to meet customers’ needs. In 2007-08, the company was forced to shut down production for several days due to some technical problems. This triggered the increase in price. It is expected that as the demand of a product goes high, its price increases because the company is unable to provide for customers’ needs.
  2. Monopoly System - The cement industry in Ghana has been plagued by monopoly. Research shows that GHACEM, the government major share-holding company, had a market share of 97%, before the construction of the new cement factory in Buipe, a small town located in Northern Ghana. Since 2007, GHACEM dominance is diminishing slowing. Recently, other cement producing firms have emerged. They include Diamond Cement, Dangote and Sol cement. Nonetheless, GHACEM is yet to experience a major competition; customers are very much attached to the local brand and are yet to patronize the imported ones.
  3. Price Wars - In a bid to prove its superiority over its competitors, GHACEM escalated the price of its cement not only to distinguish itself from other cement producing companies, but also to put a value on its product. To prevent any inferiority tag placed on them, the other cement producing companies also increased their prices, leading to frequent increases. Over the years, the war of dimension of product quality between GHACEM and local cement producing companies has resulted in price competition.
The commercial competition characterized by the increase of prices rather is affecting the consumer. Cement price instability has made building of house very difficult and challenging for the ordinary Ghanaian. More often than not, people have to leave their buildings uncompleted for so many years due to their inability to come to terms with the drastic increase in the price of cement or simply have to opt for makeshift buildings and wooden structures, while some constructors are forced to build poor quality houses to beat down construction cost.

Undoubtedly, it is high time cement producing companies in Ghana adopted strategic measures to stabilize the price of a bag of cement – making it accessible and affordable for ultimate low cost housing. But judging by the current situation, the country will not experience any price depreciation anytime soon, at least not until 2016. Ghana remains one of the most expensive countries to live in.

If house building has become a less appealing activity for the average Ghanaian, the majority of estate developers, constructors, and proprietors will defy cement price increment by adopting new ways of building houses and doubling their annual earnings at the expense of the ordinary Ghanaian and expatriates who often complain about the low-quality but high-cost rental of houses.

For the time being, in anticipating of a ‘miracle,’ Ghanaian consumers would have to adjust themselves and suffocate a little bit more under high-cost of living, wondering how long they would have to muddle through unjustified frequent price increase.

Have you seen other Cement prices in Ghana lately? What are Cement prices in your country? Leave your comment or experience with Cement below or on our Facebook Page here.

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