Domestic economic activity has continued to show signs of recovery from the adverse effects of the COVID-19 pandemic. The Bank of Ghana disclosed that consumer spending, proxied by domestic VAT collections and retail sales, posted a positive performance in January 2022, compared with the same period in 2021.
According to the Bank of Ghana, domestic VAT collections increased by 8.3 percent on a year-on-year basis to GH¢571.46 million. It however, dipped by 15.9 percent on a month-on-month basis in January 2022, from GH¢679.11 million recorded in the preceding month.
The BoG stated in its Monetary Policy Report for March 2022 that retail sales also increased by 7.1 percent year-on-year to GH¢123.65 million in January 2022, up from GH¢115.47 million recorded in the same period in 2021. Compared to December 2021, however, retail sales declined by 45.1 percent. The BoG explained that the relative year-on-year improvement in retail sales reflected increased household consumption during the review period.
The Bank of Ghana stated in the report that its latest high frequency indicators recorded broad-based improvement in most key real sector indicators in January 2022 compared to a year ago. Aside domestic VAT collections and retail sales, industrial consumption of electricity, private sector contributions to social security, vehicle registration and tourist arrivals all improved in the first month of year compared to a year ago.
Manufacturing and construction sector Activities
Activities in the manufacturing sub-sector, gauged by trends in the collection of direct taxes and private sector workers’ contributions to the Social Security and National Insurance Trust (SSNIT) Pension Scheme (Tier-1), recorded a positive performance in January 2022.
The report shows that Total Direct Taxes collected increased by 4.3 percent (year-on-year) to GH¢1,430.76 million in January 2022, relative to GH¢1,371.72 million recorded in January 2021. However, on a month-on-month basis, total Direct Taxes collected for January 2022 declined by 72.2 percent from GH¢5,148.92 million collected in December 2021.
In terms of contributions of the various sub-tax categories, Income tax (PAYE and self-employed) accounted for 45.3 percent, Corporate tax accounted for 43.4 percent, while “Other Tax Sources” contributed 11.3 percent. Total private sector workers’ contribution to the SSNIT Pension Scheme (Tier-1) went up by 28.6 percent in year-on-year terms to GH¢230.16 million in January 2022, from GH¢178.92 million collected during the corresponding period in 2021.
In line with improvement in manufacturing activities, consumption of electricity by industries went up by 11.7 percent on a year-on-year basis, during the period under review. The Bank of Ghana stated that Industries consumed 269.43 gigawatts of power in January 2022, as against 241.24 gigawatts recorded for the corresponding period in 2021.
“On a month-on-month basis, electricity consumed by industries in January 2022 increased marginally by 1.5 percent from 265.38 gigawatts utilized in December 2021. The improvement in power consumption was mainly due to increased industrial activity by manufacturing companies during the review period”.
Bank of Ghana
Meanwhile, Activity in the construction sub-sector, proxied by the volume of cement sales, declined by 6.0 percent year-on-year in January 2022 to 314,654.79 tonnes, compared with 334,700.22 tonnes recorded a year ago.
Similarly, on a month-on-month basis, total cement sales dipped by 5.9 percent in January 2022 compared with 334,344.22 tonnes recorded in December 2021. The Bank of Ghana attributed the decline in total cement sales to a slowdown in construction activities during the review period.
Vehicle Registration, Passenger Arrivals at the Airport
Transport sector activities, gauged by new vehicle registrations by the Driver and Vehicle Licensing Authority (DVLA), improved by 9.6 percent to 50,374 in January 2022, from 45,963 vehicles registered during the corresponding period of 2021. On a month-on-month basis, DVLA vehicle registrations rose significantly in January 2022, in line with seasonal trends.
International passenger arrivals increased by 52.8 percent to 56,285 in January 2022, compared with 36,838 arrivals recorded a year ago. On a month-on-month basis, however, passenger arrivals declined by 34.2 percent. The year-on-year increase in passenger arrivals reflected the continuous easing of travel restrictions in the country, the BoG disclosed.
Furthermore, international trade at the country’s two main harbours (Tema and Takoradi), as measured by laden container traffic for inbound and outbound containers, improved during the period under review. Total container traffic grew marginally by 0.9 percent, year-on-year, to 62,062 in January 2022, up from 61,500 for a similar period in 2021.
However, on a month-on-month basis, total container traffic decreased by 4.1 percent when compared to 64,727 recorded in December 2021. BoG stated that the relative year-on-year improvement in port activities was due to an uptick in international trade activities as global COVID restrictions eased over the review period.
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