Consumer spending posted combined efficiency in 11 months of 2025 – BoG – Life Pulse Daily
Editor-in-chiefFebruary 19, 20264 Mins read12
Consumer Spending Efficiency in 2025: Bank of Ghana’s Latest Report
Introduction
The Bank of Ghana’s January 2026 Monetary Policy Report has revealed significant insights into consumer spending patterns and economic activity throughout 2025. This comprehensive analysis provides crucial data on VAT collections, retail sales, manufacturing activities, and construction sector performance, offering valuable indicators of Ghana’s economic health and consumer behavior trends.
Key Points
- Domestic VAT collections increased by 38.2% year-on-year in November 2025
- Retail sales declined by 10.5% year-on-year but showed a 12.7% month-on-month improvement
- Manufacturing activities demonstrated positive growth through increased direct taxes and SSNIT contributions
- Construction sector activity, measured by cement sales, declined year-on-year but improved month-on-month
- Overall economic indicators suggest mixed but generally positive consumer spending patterns
Background
The Bank of Ghana’s monetary policy report serves as a critical tool for understanding economic trends and consumer behavior in Ghana. By analyzing various economic indicators including VAT collections, retail sales data, manufacturing activities, and construction sector performance, policymakers and businesses can gain valuable insights into the country’s economic trajectory and make informed decisions.
Analysis of Consumer Spending Trends
VAT Collections Performance
Domestic Value Added Tax (VAT) collections demonstrated remarkable growth throughout 2025, with November 2025 showing a 38.2% year-on-year increase to GH¢2.20 billion, up from GH¢1.59 billion in the same period of 2024. This substantial growth indicates robust consumer spending and improved tax compliance measures.
On a cumulative basis, the first 11 months of 2025 saw domestic VAT collections increase by 24.6% to GH¢19.29 billion, compared to GH¢15.48 billion for the corresponding period in 2024. This sustained growth suggests a strengthening economy and increased consumer confidence.
Retail Sales Dynamics
Retail sales presented a more complex picture, with November 2025 showing a 10.5% year-on-year decline to GH¢284.43 million, down from GH¢317.86 million recorded in the same period of 2024. However, the month-on-month analysis revealed a positive trend, with retail sales improving by 12.7% from GH¢252.47 million in October 2025.
The cumulative data for the first 11 months of 2025 showed an overall increase of 16.3% in retail sales, indicating that despite short-term fluctuations, the broader trend remains positive.
Manufacturing Sector Performance
Direct Tax Collections
Manufacturing activities showed encouraging signs of growth, as evidenced by direct tax collections. In July 2025, total direct taxes collected increased by 14.8% year-on-year to GH¢5.26 billion, compared to GH¢4.58 billion in the same period of 2024.
The cumulative direct tax collections for the first seven months of 2025 grew by 26.2% to GH¢47.59 billion, up from GH¢37.702 billion for the same period in 2024. This significant growth indicates increased manufacturing activity and business profitability.
SSNIT Contributions Analysis
Private sector contributions to the Social Security and National Insurance Trust (SSNIT) Pension Scheme (Tier-1) also showed positive growth. In July 2025, total contributions increased by 8.6% year-on-year to GH¢513.34 million, up from GH¢472.81 million in the same period of 2024.
The cumulative contributions for the first seven months of 2025 grew by 22.6% to GH¢3.48 billion, compared to GH¢2.84 billion for the same period in 2024. This growth suggests increased employment and wage growth in the private sector.
Construction Sector Activity
Cement Sales Trends
The construction sector, proxied by cement sales volume, showed mixed results. In July 2025, cement sales declined by 10.7% year-on-year to 212,735.33 tonnes, down from 238,167.80 tonnes recorded a year earlier.
However, the month-on-month analysis revealed improvement, with cement sales increasing by 3.1% in July 2025 compared to 206,282.00 tonnes in June 2025. The cumulative cement sales for the first seven months of 2025 improved by 2.8% to 1,644,413.19 tonnes.
Practical Advice for Businesses and Investors
For Retailers
1. **Monitor Seasonal Trends**: The month-on-month improvement in retail sales suggests that seasonal factors play a significant role. Retailers should adjust inventory and marketing strategies accordingly.
2. **Focus on Value Proposition**: With mixed consumer spending patterns, emphasizing value for money can help maintain customer loyalty.
3. **Digital Integration**: Invest in omnichannel retail strategies to capture both in-store and online consumer spending.
For Manufacturers
1. **Capitalize on Growth**: The positive trends in direct tax collections and SSNIT contributions indicate a favorable environment for manufacturing expansion.
2. **Workforce Development**: The growth in SSNIT contributions suggests a growing workforce, making it an ideal time to invest in employee training and development.
3. **Supply Chain Optimization**: With increased manufacturing activity, focus on optimizing supply chains to handle higher demand efficiently.
For Construction Industry Players
1. **Market Diversification**: Given the year-on-year decline in cement sales, consider diversifying into related construction materials or services.
2. **Cost Management**: Implement cost-saving measures to maintain profitability during periods of reduced activity.
3. **Project Planning**: Align project timelines with the observed monthly improvement trends to maximize efficiency.
FAQ
Q: What does the increase in VAT collections indicate about consumer spending?
A: The significant increase in VAT collections suggests robust consumer spending and improved economic activity, indicating that consumers are more willing to make purchases and businesses are experiencing higher sales volumes.
Q: Why did retail sales decline year-on-year but improve month-on-month?
A: This pattern often indicates seasonal variations or temporary economic factors affecting year-on-year comparisons, while the month-on-month improvement suggests underlying positive trends in consumer behavior.
Q: How reliable are cement sales as an indicator of construction sector activity?
A: Cement sales are widely used as a proxy for construction activity because cement is a fundamental material in most construction projects, making it a reliable indicator of overall sector performance.
Q: What does the growth in SSNIT contributions mean for the job market?
A: The increase in SSNIT contributions typically indicates job creation and wage growth in the private sector, suggesting a positive employment trend.
Q: How can businesses use this data for strategic planning?
A: Businesses can use these trends to adjust inventory levels, plan expansion strategies, and make informed decisions about investments and hiring based on sector-specific growth patterns.
Conclusion
The Bank of Ghana’s report on consumer spending efficiency in 2025 presents a nuanced picture of Ghana’s economic landscape. While some sectors show robust growth, others demonstrate more complex patterns requiring careful analysis. The overall trend suggests a strengthening economy with opportunities for businesses that can adapt to changing consumer behaviors and market conditions.
The significant growth in VAT collections and manufacturing activities indicates strong economic fundamentals, while the mixed performance in retail and construction sectors suggests areas requiring strategic attention. Businesses and investors should focus on understanding these trends to make informed decisions and capitalize on emerging opportunities.
Sources
– Bank of Ghana. (2026). January 2026 Monetary Policy Report
– Life Pulse Daily. (2026). Consumer spending posted combined efficiency in 11 months of 2025
– MyJoyOnline.com. (2026). Economic Indicators Report
*Note: All data and statistics are based on the Bank of Ghana’s January 2026 Monetary Policy Report and related economic indicators for the period ending November 2025.*
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