A report conducted by KPMG has revealed a high number of shifts in the savings culture of some Ghanaians geared towards saving the value of their incomes.

According to the report, double-digit inflation and the depreciation of the cedi have escalated living costs, particularly in essential areas such as food, housing, and transportation.

Moreover, a debt restructuring initiative, crucial for securing an IMF bailout, led to reduced confidence among local investors following losses incurred by bondholders.

Collectively, it said, these factors have created a volatile macroeconomic landscape, posing a threat to consumers’ purchasing capabilities.

Thirty-five percent of respondents indicated savings and investments as one of their top priorities - the third highest, highlighting a resilient savings behavior despite economic pressures.

Notably, 92% of respondents affirmed their commitment to saving.

“However, only one in five is able to set aside more than twenty percent of their income, signaling that rising costs have eroded disposable incomes. In response to this challenge, some Ghanaians have turned to saving in foreign currencies to safeguard the value of their money” it stated.

In this year’s research, KPMG West Africa, delved into customer spending habits to understand their financial priorities. The findings unveiled that food (62%) and transportation (40%) stood out as the primary expenses for respondents.

These categories align with inflation drivers in Ghana, such as food prices and transportation fares, particularly fuel prices. Consequently, consumers have strategically adjusted their spending patterns and embraced various strategies to optimise their budgets for long-term savings.

18 to 25 years spend more on food, airtime and data

Similar to their Nigerian counterparts, the research revealed the spending patterns of individuals aged 18 to 25, indicating significant allocations to categories such as food, airtime & data, transportation, education, and personal care.

To foster loyalty among these young customers, it stressed that banks could consider implementing reward programmes linked to specific transactions or spending thresholds. This could involve offering complimentary airtime, discounts on ride-hailing services, or vouchers for frequently visited restaurants and food vendors.

Such initiatives could enhance customer retention and engagement within this demographic.

“For more affluent banking customers, those earning over ¢20,000 monthly, our survey found that their primary expenditure focuses on savings and investments. Remarkably, approximately 81% of these customers save over 20% of their income, while around 43% allocate more than 20% towards investments.

This presents an opportunity for banks to provide tailored investment guidance to assist these clients in preserving their capital amidst competing financial demands” the report statesd.

Meanwhile, consumers are adapting to manage their expenses by embracing alternatives, such as opting for more budget-friendly brands. Additionally, there is a noticeable shift in household spending priorities from non-essential categories towards essential ones.

According to the report, these are the top five spending categories in Ghana

62%        -              Food

40%         -             Transportation

35%        -              Savings and Investments

34%        -              Power Utilities

33%        -              Family Obligations