President Paul Kagame has said that the Rwandan government was only absorbing loss in Cimerwa, the country’s biggest cement maker. He has therefore directed the 49 percent stake held by the state be put up for sale.
“This factory does not even make a quarter of the cement needed,” local news platform KT Press quoted Kagame to have said at a retreat in the country.
For more than three decades, Cimerwa has failed to meet local cement demand, with the country having to import to satisfy domestic needs. This, in part, widened the country’s trade deficit with its EAC peers by $16 million. Cement imports rose 31 percent to 154,486 tonnes in the first half of 2018 from 117,959 tonnes during the same period in 2017.
In 2012, South African cement giant – Pretoria Portland Cement Co (PPC) bought 51 percent shares in Cimerwa, with the remaining co-owned by government and a consortium of local investors including Rwanda Social Security Board (RSSB) and Rwanda Investment Group.
Prices went up last March as scarcity of cement escalated in the country. Cimerwa had disclosed it was undergoing a plant upgrade, which involved de-bottlenecking the plant to increase production capacity.
Kagame says while government continues to absorb loss in Cimerwa, PPC continues to make profits through different tricks such as transfer pricing. Hence, he tasked Prime Minister Dr. Edourd Ngirente to withdraw the government’s shareholding as soon as possible.
Ngirente told participants of the retreat that government’s shares would be on the market before the end of March.