Ghana's Economy Shows Mixed Signals: VAT Up 20.8% But Retail Sales Slip in Q1 2026

Consumer Spending Gains, But Retail Sector Struggles

Ghana's economy delivered a mixed performance in the first quarter of 2026, according to the Bank of Ghana's May Monetary Policy Report. Domestic Value Added Tax (VAT) collections—a key indicator of consumer spending—climbed 20.8% year-on-year to GH¢5.818 billion in Q1 2026, up from GH¢4.815 billion a year earlier. March alone saw VAT surge 35.7% to GH¢2.064 billion.

However, the retail sector told a different story. Retail sales moderated 1.9% year-on-year in March 2026, falling to GH¢262.84 million from GH¢268.00 million in March 2025. On a quarter basis, cumulative retail sales increased just 5.0%, suggesting consumer confidence remains cautious despite improved VAT collections.

Manufacturing Boom Masks Construction Decline

Manufacturing activity showed stronger signs of recovery. Total direct taxes jumped 40.6% year-on-year to GH¢12.269 billion in March 2026, whilst Q1 collections rose 20.4% to GH¢22.830 billion. Corporate tax accounted for 65.7% of collections, with income tax contributing 20.9%.

The construction sector, however, contracted sharply. Cement sales—the primary measure of building activity—fell 10.7% year-on-year in March 2026 to 226,629 tonnes. Q1 cement sales declined 10% overall to 636,283 tonnes, reflecting reduced construction investment during the period.

• Domestic VAT collections rose 20.8% in Q1 2026 versus same period 2025
• Retail sales declined 1.9% year-on-year but improved month-on-month by 13.2%
• Construction sector contracted 10%, with cement sales falling significantly