Cement prices in Zimbabwe have skyrocketed over the past two months, sending shockwaves through the construction industry. A vital building material that cost around $9-10 per 50kg bag in September is now going for $20 or more. This overnight doubling in cement prices has sparked chaos and uncertainty. Housing projects are stalling, construction firms are struggling, and home renovators cannot source supplies. Yet many are confused about what exactly is causing the price spike, how long it could last, and what it means for Zimbabwe’s property boom.
.To help make sense of the unfolding cement shortage saga, we have prepared this comprehensive frequently asked questions guide. It provides insider details and analysis on:
- The factors that have driven cement prices up so rapidly
- How reduced manufacturing and expiring import licenses have crimped supply
- Whether government price controls or policy changes are coming
- How long experts expect the high prices to persist
- The outlook for Zimbabwe’s construction and housing industry
- Understanding the dynamics behind this cement supply and demand crunch is key to planning for property projects in the current climate.
This FAQ will arm builders, developers and homeowners with the knowledge needed to navigate the shortage.
Cement prices have doubled in the past 2 months, rising from around $9-10 per 50kg bag to $20 now.
There are a few key reasons cement prices have surged so rapidly in a short period of time:
reduced local production, expiring import licenses leading to fewer imports and booming demand from the construction sector. This combination of contracting supply and rising demand has driven the acute shortage and cement price inflation.
Zimbabwe’s major cement manufacturers like PPC have faced production disruptions lately. Their manufacturing plants have been undergoing retooling and maintenance work to boost capacities. However, this has limited actual output volumes in the short term, creating a supply gap.
The Zimbabwean government had been providing special import licenses so cement firms could import cement to fill the production shortfall. But many of these licenses have expired recently, meaning cement imports have dropped sharply. Less imports have widened the supply gap just as construction demand is surging.
Housing, infrastructure, commercial buildings and other construction have been booming in Zimbabwe over the past year. Major new private and public projects have demanded huge cement volumes, fueling the supply squeeze.
Analysts predict the shortage and price spike could last up to 6 months if production and imports don’t improve fast. But the government is hoping to stabilise prices within 8-12 weeks using imports and policy measures.
Many projects face major delays unless cement is made affordable. Some developers have halted projects already. Small home builders and renovators are also struggling to source cement at any price.
For projects underway, contractors have been forced to pay the higher prices, squeezing margins.
Major housing projects may have to slow construction or pause entirely until the cement shortage is resolved. However, the property industry remains optimistic that most planned projects will still go ahead in the medium term. Ensuring adequate cement supply will be crucial for Zimbabwe’s construction and housing boom to continue.
Cement made in Zambia costs around $3.50 – $6 per 50kg bag. But in Zimbabwe, it normally sells for around $10 – $12. The main reason is the high cost of manufacturing in Zimbabwe driven by high energy costs and high logistic or transport costs, which are key cost drivers in the cement industry. The Zimbabwean government has also claimed that Zambian cement is of lower quality. It doesn’t meet the same standards as cement produced locally in Zimbabwe.
The Zimbabwean government cares about the local cement industry which they protect. There is also the issue of standards with local cement often being preferred by builders. Builders also prefer the stronger and more durable cement produced by manufacturers in Zimbabwe.
Zimbabwe does not ban cement imports from Zambia. But they are limited by import licensing requirements. Most cement used is sourced from reputable local producers like PPC, Lafarge and Sino-Zim.
The cement price spike has been sudden, but with collaborative efforts between industry and government, most experts expect the shortage will be resolved in the coming months. In the meantime, construction will slow due to unexpected rises in project costs brought about by the changes in cement prices.