Domestic economic activity improved in the third quarter of 2023, evidenced by the high-frequency indicators, albeit at a slower pace.

According to the Bank of Ghana, indicators of consumer spending, manufacturing activities, industrial consumption of electricity, and international tourist arrivals picked up during the review quarter, while construction sector activities, vehicle registration, and port activity declined.

Consumer spending

The Central Bank said consumer spending, proxied by domestic VAT collections and retail sales, improved in quarter 3, 2023, compared with figures recorded in the corresponding period of 2022.

Domestic VAT collections grew by 38.0% (year-on-year) to ¢3.095 billion, relative to ¢2.242 billion collected during the corresponding quarter in 2022. Domestic VAT, however, decreased by 8.3%, from ¢3.374 billion collected in quarter 2, 2023.

Also, retail sales increased by 40.6%, year-on-year, to ¢498.57 million in the third quarter of 2023, from ¢354.62 million recorded in the corresponding quarter of 2022.

The improvement in retail sales, the Central Bank, said could be attributed to an increase in household spending during the review period

Manufacturing Activities

Manufacturing-related activities, as proxied by trends in the collection of direct taxes (income, corporate and others) and private sector workers’ contributions to the SSNIT Pension Scheme (Tier-1), posted a positive outturn in quarter 3, 2023 relative to the same period of 2022.

Total direct taxes collected increased by 50.0% to ¢12.352 billion in quarter 3, 2023, from ¢8.233 billion recorded in quarter 3, 2022.

Total direct taxes collected for the quarter under review, also went up marginally by 2.5%, from ¢12.046 billion collected in quarter 2, 2023. In terms of contribution of the various sub-tax categories, Corporate Tax accounted for 49.7%, followed by Income Tax (PAYE and Self-employed) with 36.4%, while other tax sources contributed 13.9%.

Private sector workers pension contributions rose 35.5%

Similarly, private sector workers’ contributions to the SSNIT Pension Scheme (Tier-1) rose by 35.5% to ¢1.057 billion in quarter 3, 2023, from ¢779.97 million collected in the same quarter of 2022.

Total contribution in the review period also increased by 6.9% when compared with ¢989.21 million for quarter 2, 2022.

The improvement in private workers’ contributions to the Tier1 pension scheme was due to the registration of new employees as well as improved compliance by private sector employers.