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Skyrocketing Prices Of Iron Rods Getting Worse: Gov't Must Own Multibillion Dollar Sector & Save The Situation - Developer

Skyrocketing Prices Of Iron Rods Getting Worse: Gov't Must Own Multibillion Dollar Sector & Save The Situation - Developer

Fresh agitations have risen, as the skyrocketing prices of building materials are getting worse by the day. The phenomenon has brought frustration on industry players in the real estate, construction and general built environment.

One of such frustrated estate developer is Mr.  Andy Bediako Asare, Chief Executive Officer of Dream             World Estate who is into construction, leasing and Property management services for residential and commercial properties in Accra and beyond.

 Speaking to Real Estate Times Africa  (RET Africa), he insisted that the canker was a general phenomenon that was giving sleepless nights to developers who, as a result, have to equally market their properties at skyrocketing prices.

It is a true reflection of what is happening on the ground. I’m into construction, so I get them [figures] from the merchants, from the iron rods sellers, you understand. It is a general reflection. You can check from Atala for instance, ask them how much is 16mm or 12mm iron rods.  Last year around December, a ton of iron rods cost ȼ3,500.00 and just this February, it has gone up to ȼ5,400. It is hilarious because, you can’t sell something that costs ȼ3,400 and in the next 3, 4 months you are selling it for ȼ5,400. It doesn’t add up”, he stated.

He noted that when the retailers were asked of the causes of the incremental jump in prices, they blamed it on Covid-19 restrictions which did not allow them to import more raw materials to enable them manufacture more rebars (iron rods) and thus have a reduction in prices. Consequently, with the limited supply, the retailers justify the high prices.

It is like demand and supply, but it doesn’t make sense to me. You can’t do this in the developed countries. You can’t buy something for ȼ3,500 and 4 months down the line, there is 40% increment, it is never done anywhere; and it is even getting worse.  I won’t be shocked if next month it will get to ȼ6,000.00, and it is getting worse by the day Madam. A six (6) inches block used to cost around ȼ3.20p, now a 6 inches block costs ȼ4.60p. If you buy a thousand, that’s ȼ4,600”, he explained.

According to the Estate Manager, the worrying phenomenon would have a trickledown effect on all, as developers like himself would increase prices of properties due to the high rise in prices of building materials.

“This is affecting our business and everybody. Because the thing is, I’m into construction, right. If I put up a 4-bedroom house two years ago which cost me – give and take, USD100,000, now, it will cost me even twice the amount. And at the end of the day, I will have to charge operational cost and all that, and then sell it to the buyer; that will surely make the property expensive.  Now we have a one bedroom apartment going for ȼ1,500.00 and ȼ2,000.00; but on a normal day, a 1-bedroom apartment should cost ȼ600.00 or ȼ700.00; but because construction cost is high, its making properties also go high”, he lamented.

Mr.  Andy Bediako Asare therefore called on Government with immediate alacrity to step in and save the situation.

From my humble view, what the Government should do is, they should invest in to the iron rod business, you understand. The steel business is a multibillion dollar business. The Government should own it, we shouldn’t give it to the Chinese and the Lebanese. Right now, when it comes to iron rods, nails, sand, and gravels; all these elements when it comes to construction – are being controlled by the Chinese. The Chinese own all the quarry sites in this country. Do you understand what am saying? A truck of sand used to cost ȼ800.00, now it is ȼ1,200.00. A trip of gravel used to cost ȼ1,800.00, now it is ȼ2,200.00, and it is going to change very soon. So it is getting worse. The Government should look at it because the steel company is a multibillion dollar empire, or else you cannot build a house soon”, he pleaded.

A few minutes after speaking with RET Africa, Mr.  Andy Bediako Asare called back to say that the price of iron rods has risen up from the previous figures he had quoted.

I posted this barely a month ago, that [a ton of iron rods] price was ȼ5,400.00, now it is ȼ6,400.00 for the standard; and the foreign one is ȼ6,700.00. I’m sure by the close of the year, a ton of iron rods will get to ȼ10,000.00. You can call them and find out”, he fumed.

When RET Africa contacted Atala Limited (a leading retailer of building materials such as rebars (iron rods), Cement, and Binding wire with presence in 10 regions across Ghana), the company confirmed one (1) ton of 16mm iron rods as follows:

Foreign: ȼ6,700.00

Standard: ȼ6,400.00

Local / Ordinary: ȼ5,200.00

Mr.  Andy Bediako Asare deflated the argument that put the blame of the skyrocketing prices of building materials on the global pandemic – Covid-19 restrictions and in the inability of merchants to import steel products.

Covid, no, no, no. I don’t think we should blame this on Covid. Covid has nothing to do with it. If we are a serious country, right; we should own these steel companies, we should not import them [steel products], you understand. We have all the minerals here, we have iron ore too. I don’t understand. Why should we import all of these?” he quizzed.




Source: Yvette Appiah (Journalist, Real Estate Times Africa)

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