Subdued consumer confidence expected to persist in 2023 and 2024
Fitch Solutions anticipates a challenging landscape for Ghana’s consumer sector, with subdued confidence expected to persist throughout the remainder of 2023 and into 2024, closely mirroring the trajectory of Ghana’s inflationary pressures.
In the latest data available for June 2023, Ghanaian consumer confidence experienced a setback, falling to 87.5 from its brief upswing to 88.8 in April of the same year.
While this figure still stands notably higher than the 79.7 recorded in June 2022, it remains below the robust average of 96.5 observed during the tumultuous year of the Covid-19 pandemic in 2020.
This decline can be attributed to a combination of factors, including persistently high levels of inflation, a deceleration in economic growth, growing dissatisfaction with government policies, and recent interest rate hikes, all contributing to a subdued sentiment among Ghana’s consumers.
Fitch Solutions in its Ghana Consumer Outlook Report, underscores that these trends have taken a toll on consumer activity within the Ghanaian market.
In Q2 2023 for instance, the total value of mobile money transactions dropped from GHS 159.7 billion (USD 14.0 billion) in March 2023 to GHS 149.4 billion (USD 13.1 billion) by June 2023, according to the latest available data.
According to the research agency, it’s important to note that a significant portion of the nominal value increase since Q4 2021 can be attributed to the specter of inflation, which has maintained an alarming average of 33.4% year-on-year between October 2021 and July 2023.
Simultaneously, as inflation resurged, the volume of mobile money transactions declined, plummeting from 563 million transactions in May to 532 million transactions in June 2023, reflecting a prudent consumer approach amid economic uncertainties.
