- Macro Stability Lifts Business Confidence Above 100-Point Benchmark – AGI
Business confidence in Ghana remained firmly in optimistic territory in the second quarter of 2026, suggesting that improvements in macroeconomic stability are beginning to feed through to corporate sentiment even as firms continue to face high taxation, imported input costs and external geopolitical risks.
The Association of Ghana Industries’ Business Barometer placed the Business Confidence Index at 108.70 in the second quarter, above the benchmark level of 100 that separates optimism from pessimism.
The reading provides an important signal about how businesses are assessing Ghana’s economic trajectory after a period in which inflationary pressures, exchange-rate volatility, high borrowing costs and fiscal uncertainty complicated investment and planning decisions.
“We have a baseline we call the 100 mark baseline. Any point above the baseline means that the confidence level is really high, and any point below it means that people are not very confident about the economy,” said Seth Twum-Akwaboa, Chief Executive Officer of the Association of Ghana Industries.
At 108.70, the index suggests that businesses are broadly positive about current operating conditions and the direction of economic policy. Continued macroeconomic stability appears to have improved expectations that conditions could remain supportive through the second half of the year.
But the headline figure also conceals risks that could determine whether improved confidence ultimately translates into capital expenditure, hiring and higher production.
One of the most significant threats is external.
Ghana remains exposed to movements in global energy, commodity and financial markets, meaning geopolitical instability can quickly affect domestic business costs through fuel prices, freight charges, insurance and imported raw materials.
Mr Twum-Akwaboa pointed particularly to the conflict involving Iran.
“They are hoping that the current war that is going on in Iran could stop so that its potential negative effect will not be too devastating,” he said.
“If it is, then there isn’t much businesses don’t have control over it, and then they will see the impact negatively on their bottom line.”
That vulnerability is particularly important for manufacturers because Ghana’s industrial base remains significantly dependent on imported intermediate goods and raw materials.
A stable exchange rate can improve planning, but it cannot eliminate exposure to increases in international commodity and freight costs.
“There’s also the issue of cost of raw materials because we import a lot of our raw materials. So it means that we need to deepen our value chains,” Mr Twum-Akwaboa said.
That observation points to a structural issue beyond the quarterly confidence reading.
Greater domestic production of industrial inputs could reduce exposure to foreign-exchange and external price shocks while creating stronger linkages between agriculture, manufacturing and services.
For policymakers, the next challenge is therefore not simply maintaining macroeconomic stability but using that stability to support investment in domestic supply chains.
More local sourcing could also strengthen Ghana’s external position by reducing import dependence and retaining more economic value within the country.
Taxation remains another major concern for businesses.
“VAT rate is still high, and then several other taxes. And the businesses cite that as one of the challenges,” the AGI chief executive said.
The concern reflects a difficult policy trade-off.
Government needs stronger domestic revenue mobilisation to sustain fiscal consolidation and reduce dependence on borrowing. But a heavy tax burden concentrated on formal businesses can weaken margins and discourage investment.
For manufacturers, the impact becomes more pronounced when taxes combine with electricity, transport, financing and imported input costs.
The challenge is therefore to broaden the tax base while avoiding excessive pressure on the relatively small number of businesses already operating formally.
Mr Twum-Akwaboa nevertheless acknowledged recent policy management.
“For now, government has done well in containing the situation,” he said.
The stronger confidence reading matters because expectations often influence investment before the underlying data fully reflect changes in economic activity.
Businesses that expect stable inflation, predictable exchange rates and improving demand are more likely to expand inventories, increase capacity and recruit workers.
But confidence can deteriorate rapidly if firms begin anticipating renewed currency volatility or sharp increases in input costs.
The second-quarter barometer should therefore be read as a positive but fragile signal.
At 108.70, Ghanaian businesses are not merely neutral about the outlook. They remain comfortably above AGI’s optimism threshold.
The harder test will be whether that sentiment translates into actual investment.
For the second half of 2026, three issues are likely to be decisive: maintaining macroeconomic stability, limiting the domestic impact of external shocks and addressing structural business costs such as taxation and imported production inputs.
If companies respond by committing capital, expanding production and creating jobs, the Business Barometer could prove to be an early indicator of a broader private-sector recovery.
If geopolitical risks intensify or domestic cost pressures remain unresolved, however, today’s optimism could prove considerably more fragile.
For Ghana, sustaining confidence above the 100-point threshold will ultimately require more than stable macroeconomic indicators.
It will require an operating environment in which businesses can convert optimism into productive investment, stronger domestic value chains and durable growth.
