Monrovia - Several major cement importers have expressed frustration over the extremely slow pace of government projects across the country this dry season, resulting in a very high amount of cement on the market, and cement is a perishable commodity.

A number of major projects have simply failed to materialize, after the five months delay in passage of the National Budget and the subsequent inability of the Government to fund major projects.

Over the past six months, major cement importers including Fouta Corporation, Fortress, Global Alliance Industry, Jumbree, and Cemenco have all imported almost 2 million bags of cement to Liberia, in anticipation of Government Projects in several sectors such as road construction, school and housing construction, the Ministerial Complex, and several projects touted in the National Budget and during budget deliberations by officials of the various Ministries.

In the words of one importer, "We are in a serious mess. We thought this was a development focused budget.  The Government makes us pay taxes, port charges, and several other importation fees upfront.  We have warehousing costs, bank charges, transportation and logistics costs, and now the cement is not moving.  Government is the biggest spender and also the biggest taker, and so we are all about to find ourselves in a real mess."

Another major concern of the importers is that their credit standing with the banks is at risk because of this market saturation.

The current market condition poses a serious systemic risk to the banking system because at least five commercial banks are holding major cement transactions on their portfolios and those loans are being backed by the cement in the warehouses as the collateral. If the cement should spoil or not be sold, it will severely impact the banks as most of those transactions are well in excess of USD $1.5 million dollars.

Another importer added that "there is a serious need for the Central Bank to remain cognizant of this market reality and work with the commercial banks to completely restructure our loans and help solve this problem quickly, which is directly due to the slow spending of Government at this critical time.  At present, over fifteen warehouses on Bushrod Island are filled to the ceiling with cement and we have no idea when major projects will commence to move the product."

In addition to calling on the Central Bank to take action in working with commercial lenders and rework cement loan portfolios, importers want government to allow them to transport some of the cement to neighboring Sierra Leone and Guinea where the pace of growth and development is faster at no export taxation under Mano River Union trade protocols, as well as call on APM terminals to reduce its tariff on cement which is USD $10.59 per tonnage.

Importers are also calling on the Government to encourage the use of cement in road pavement as is done in other developing countries as opposes to relying only on bitumen (kotar). The cities of Harper and Greenville roads were paved years ago with layers of cement and those roads are still strong today.

"If this Government does not sit with us to address this problem, many of the cement importers and banks that financed these transactions will be affected, and then we will regress to the days of cement shortages and long lines and high price in cement on consumers, as there will only be the unfair monopoly left standing."  Cement is needed for development, yet taxes are not paid under a custom bonded arrangement, nor has government waived the 10% import duty on cement as was done on rice.

Importers also believe that CEMENCO which is protected and partially owned by the Government as a 26% shareholder still has a complete advantage in that it does not pay certain import taxes and duty levied on other importers, but yet government sets the wholesale price of imported cement at the same value with locally produced cement which is of a lower grade and quality than the 42.5R  grade that is allowed to be imported under international standards.