The Bank of Ghana (BoG) has released its latest Monetary Policy Report, revealing a dip in consumer and business confidence as of June 2024.
According to the report, exchange rate volatility in May 2024 emerged as a significant challenge for businesses, affecting their operations and financial stability.
The Business Confidence Index fell to 88.8 in June 2024 from 92.6 in the same period the previous year. Businesses expressed concerns about the cost implications of rapid exchange rate depreciation observed in May. Similarly, the Consumer Confidence Index declined to 81.2 in June, down from 87.7 in April 2024, driven by high food prices and uncertainty about future economic conditions.
These findings align with trends in Ghana’s Purchasing Managers’ Index (PMI), which dropped below the 50.0 benchmark to 49.7 in June 2024, compared to 51.6 in May, indicating a contraction in business activity.
Industrial Electricity Consumption
The report also highlighted a marginal decline in industrial electricity consumption, which decreased by 1.2% in May 2024 to 295.71 gigawatts, down from 299.23 gigawatts in May 2023. Cumulatively, industrial electricity consumption for the first five months of 2024 fell by 7.0% to 1,399.80 gigawatts, compared to 1,505.47 gigawatts in the same period last year.
Manufacturing Activities
Despite the challenges, the manufacturing sector showed some improvement. The report indicated a 43.7% year-on-year increase in total direct tax collection, reaching GH¢4.11 billion in May 2024, up from GH¢2.86 billion in May 2023. Cumulatively, direct taxes collected in the first five months of 2024 rose by 31.6% to GH¢22.19 billion, compared to GH¢16.86 billion in the same period in 2023. Income tax (PAYE and self-employed) accounted for 48.8% of the total, while corporate tax contributed 38.4%, and other tax sources made up 12.8%.
Private sector contributions to the SSNIT Pension Scheme (Tier-1) also saw a year-on-year increase of 39.6%, reaching GH¢470.92 million in May 2024, compared to GH¢337.23 million in May 2023. Cumulatively, contributions for the first five months of 2024 grew by 28.8% to GH¢1.97 billion, up from GH¢1.53 billion in the same period in 2023.
Construction Sector
The construction sector experienced a year-on-year increase in cement sales, rising by 10.6% to 235,050.55 tonnes in May 2024, compared to 212,584.38 tonnes in May 2023. On a month-on-month basis, cement sales increased by 13.2% in May 2024, up from 207,691.74 tonnes in April 2024. However, for the first five months of 2024, total cement sales slightly declined by 2.3% to 1,132,654.32 tonnes, down from 1,158,854.69 tonnes in the same period in 2023. The year-on-year improvement in cement sales was attributed to an uptick in construction activities during the review period.
The report reflects the complex economic landscape in Ghana, highlighting both challenges and areas of growth across various sectors.
