The economic pulse quickens: The impact on households and businesses

By Samuel Lartey(Prof)

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 The Bank of Ghana’s latest high-frequency indicators provide an encouraging snapshot of Ghana’s economic trajectory. According to Governor Dr. Johnson Asiama, the Composite Index of Economic Activity (CIEA) grew by 6.1% in July 2025, compared with just 1.9% in July 2024.

This remarkable recovery signals not only a rebound in trade, consumption, and industrial production but also renewed momentum for households and businesses preparing for the festive season and beyond. The question, however, is whether this growth can be sustained given Ghana’s structural challenges and global uncertainties.

The Drivers Behind the Growth Surge

The CIEA, a comprehensive barometer of economic activity, aggregates data from ports, VAT collections, cement sales, imports, exports, and electricity consumption. The July 2025 expansion reflects three main pillars:

Rising International Trade

Ghana’s total exports grew by 15% year-on-year, driven by higher receipts from gold, oil, and cocoa. Gold prices surged above $2,300 per ounce in mid-2025, boosting foreign exchange earnings. Imports also rose, particularly of machinery and consumer goods, reflecting rising domestic demand.

Robust Domestic Consumption

VAT collections increased by 12% in Q2 2025, signaling stronger retail activity.

Remittances, which historically contribute over $4 billion annually, have also supported household spending. A gradual easing of inflation, which fell from 40.1% in October 2023 to around 22% by July 2025, has improved consumer purchasing power.

Industrial Output Recovery

Cement sales, a proxy for construction activity, climbed 18% year-on-year, reflecting infrastructure works and private real estate projects. Manufacturing output expanded with renewed energy supply stability and increased demand from both local and regional markets.

Implications for Businesses

Businesses in Ghana stand at a promising but delicate crossroads.

Retail and Services:

With rising consumption ahead of the yuletide, retailers can expect higher sales volumes, especially in fast-moving consumer goods (FMCGs), electronics, and apparel. For instance, supermarkets in Accra and Kumasi reported year-to-date sales growth of 8–10% compared to 2024.

Manufacturing and Construction:

The surge in cement sales points to renewed opportunities for contractors and building material suppliers. Real estate developers, particularly in urban areas, are likely to benefit as demand for housing edges upward amidst Ghana’s 2 million housing deficit.

Trade and Logistics

Increased imports mean logistics companies, port operators, and transport services are gearing up for heightened activity, translating into seasonal job creation.

Financial Sector:

Commercial banks may see higher credit demand from businesses seeking to restock ahead of the festive season. However, with the Bank of Ghana’s Monetary Policy Rate (MPR) still high at 23%, the cost of credit remains a challenge.

Impact on Households

Households are both beneficiaries and potential victims of this growth wave.

Incomes and Employment:

Seasonal hiring in retail, hospitality, and logistics will create temporary jobs, improving household incomes in the short run.

Consumption Boost:

Families can expect improved access to goods and services, particularly imported consumer items that dominate yuletide spending.

Inflation Concerns:

Although inflation has eased, higher consumption may fuel price hikes during Christmas. For example, poultry prices spiked by 15% in December 2024, a trend that could repeat in 2025 if supply lags behind demand.

Energy and Utility Bills:

Industrial growth and festive demand could strain electricity supply, with possible tariff adjustments feeding into household budgets.

Sustainability of the Momentum

While the July 2025 numbers are impressive, sustaining this momentum requires careful balancing of policy and structural reforms.

Export-Led Growth vs Import Dependence:

Ghana must ensure that export growth outpaces import demand to prevent renewed pressure on the cedi. The currency, which appreciated by 40% in H1 2025, could weaken if import bills rise faster than export earnings.

Debt and Fiscal Discipline:

Ghana remains under an IMF-supported programme, with debt-to-GDP hovering around 70%. Fiscal prudence will be essential to prevent a relapse into unsustainable deficits.

Private Sector Competitiveness:

Long-term sustainability hinges on reducing the cost of doing business, particularly interest rates, energy tariffs, and bureaucratic bottlenecks that hinder SMEs.

Global Risks:

External shocks, such as oil price volatility or geopolitical tensions, could undermine Ghana’s trade-driven gains.

Conclusion

The Bank of Ghana’s July 2025 report paints a cautiously optimistic picture: Ghana’s economy is regaining vitality, with growth in trade, consumption, and industrial production offering relief to households and opportunities for businesses.

As the yuletide approaches, retailers, manufacturers, and service providers stand to benefit from heightened demand, while families may enjoy greater purchasing power and seasonal employment prospects. Yet, the sustainability of this momentum lies in prudent macroeconomic management, export diversification, and stronger private-sector competitiveness. The festive cheer will be more meaningful if Ghana translates these short-term gains into a foundation for inclusive and long-lasting prosperity.

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