Consumer spending, proxied by domestic VAT collections and retail sales, posted a positive performance in September 2022, compared with the corresponding period in 2021.
The November 2022 edition of the Monetary Policy Report released by the Bank of Ghana (BoG) revealed that domestic VAT collections increased by 19.9 percent on a year-on-year basis to GH¢755.53 million in September 2022, from GH¢630.34 million in the corresponding month last year.
“Cumulatively, total domestic VAT for the first three quarters of 2022 went up by 20.3 percent to GH¢6,073.00 million compared with GH¢5,049.61 million for the corresponding period of last year.”
Bank of Ghana
Likewise, retail sales increased by 8.9 percent (year-on-year) to GH¢118.78 million in September 2022, up from the GH¢109.10 million recorded in the same period in 2021. On a month-on-month basis however, retail sales declined marginally by 1.1 percent in September 2022 from GH¢120.10 million in the preceding month.
Irrespective of the month-on-month decline in September, in cumulative terms, retail sales for the first three quarters of 2022 went up by 4.9 percent.
Aside Domestic VAT collections and retail sales which capture the consumer side of the real sector, manufacturing activities and industrial consumption of electricity, mostly related to producers, also improved in the review period.
Manufacturing 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), improved in September 2022.
BoG data revealed that Total Direct Taxes collected increased by 30.0 percent (year-on-year) to GH¢4,004.27 million in September 2022, relative to GH¢3,080.55 million recorded in a similar period in 2021.
“Cumulatively, total Direct Taxes collected for the first three quarters of 2022 went up by 25.2 percent to GH¢23,058.72 million, from GH¢18,418.30 million for the same period in 2021. In terms of contributions of the various sub-tax categories, Corporate tax accounted for 57.1 percent, Income tax (PAYE and self-employed) accounted for 28.6 percent, while ‘Other Tax Sources’ contributed 14.3 percent.”
Bank of Ghana
Total private sector workers’ contribution to the SSNIT Pension Scheme (Tier-1) increased by 14.0 percent (year-on-year) to GH¢245.89 million in September 2022, from GH¢215.67 million collected during the corresponding period in 2021.
Cumulatively, for the first three quarters of 2022, the contribution grew by 20.8 percent to GH¢2,293.11 million, relative to GH¢1,898.96 million recorded in the same period in 2021.
Construction sub-sector activity
Still within the industry sector, activity in the construction sub-sector, proxied by the volume of cement sales, declined by 20.0 percent (year-on-year) in September 2022 to 255,045.87 tonnes, down from 318,655.90 tonnes recorded a year ago.
On a month-on-month basis, total cement sales dipped by 9.1 percent in September 2022 compared with the 280,707.85 tonnes recorded in August 2022.
Cement sales for the first three quarters of 2022 went down by 15.6 percent to 2,623,228.51 tonnes, from 3,108,877.03 tonnes for the same period of 2021. The Bank of Ghana explained that the decline in total cement sales was due to a slowdown in construction activities during the review period.
On the contrary, consumption of electricity by industries increased by 14.9 percent on a year-on-year basis during the period under review. Industries consumed 286.76 gigawatts of power in September 2022, as against 249.68 gigawatts recorded for the corresponding period in 2021.
On a month-on-month basis, power consumed by industries in September 2022 went up by 8.1 percent from 265.24 gigawatts utilized for August 2022. In cumulative terms, electricity consumed by industries for the first three quarters of 2022 increased by 5.6 percent to 2,454.35 gigawatts from 2,325.24 gigawatts for the corresponding period a year ago.
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