The Bank of Ghana (BoG) has disclosed in its latest Monetary Policy Report that confidence surveys conducted in June 2024 showed a slight weakening in consumer and business sentiments.
The central bank noted that exchange rate fluctuations in May 2024 were a significant challenge for businesses, impacting their operations.
“The Business Confidence Index dipped to 88.8 from 92.6 in the same comparative period as businesses expressed concern about the cost implications of the rapid exchange rate depreciation observed in May 2024”, it said.
Similarly, the report showed that Consumer Confidence Index declined to 81.2 in June 2024, from 87.7 in April 2024, on account of high food prices and some uncertainties about future economic conditions.
“These findings were broadly in line with observed trends in Ghana’s Purchasing Managers’ Index (PMI), which fell below the 50.0 benchmark to 49.7 in June 2024, from 51.6 in the previous month”, the BoG explained in the report.
Industrial Consumption of Electricity
The report also indicated a slight decrease in industrial electricity consumption, falling by 1.2 percent to 295.71 gigawatts in May 2024, compared to 299.23 gigawatts in the same month of 2023.
Overall, industrial electricity usage for the first five months of 2024 dropped by 7.0 percent to 1,399.80 gigawatts, down from 1,505.47 gigawatts in the equivalent period last year.
Manufacturing Activities
The report states that manufacturing sector activities, as measured by trends in direct tax collections and private sector contributions to the Social Security and National Insurance Trust (SSNIT) Pension Scheme (Tier-1), showed improvement in May 2024.
Additionally, total direct taxes rose by 43.7 percent year-on-year to GH¢4.11 billion in May 2024, up from GH¢2.86 billion in May 2023.
“Cumulatively, total direct taxes collected for the first five months of 2024 went up by 31.6 percent to GH¢22.19 billion, compared to ¢16.86 billion recorded in the first five months of 2023”.
Regarding the contributions from different sub-tax categories, income tax (both PAYE and self-employed) represented 48.8 percent, corporate tax made up 38.4 percent, and “other tax sources” contributed 12.8 percent.
Additionally, private sector workers’ contributions to the SSNIT Pension Scheme (Tier-1) rose by 39.6 percent year-on-year, reaching GH¢470.92 million in May 2024, compared to GH¢337.23 million in May 2023.
For the first five months of 2024, the cumulative contributions increased by 28.8 percent to GH¢1.97 billion, up from GH¢1.53 billion in the same period of 2023.
Construction Sector
The report showed that activities in the construction sub-sector, proxied by the volume of cement sales, increased by 10.6 percent (year-on-year) to 235,050.55 tonnes in May 2024, up from 212,584.38 tonnes recorded a year ago.
On a month-on-month basis, total cement sales increased by 13.2 percent in May 2024 compared with the 207,691.74 tonnes recorded in April 2024.
“However, for the first five months of 2024, sales declined marginally by 2.3 percent to 1,132,654.32 tonnes, from 1,158,854.69 tonnes for the same period of 2023. The relative improvement in total cement sales, year-on-year, was due to an uptick in construction activities during the review period”.