Ghana businesses remain optimistic despite rising costs and import competition

Ghanaian businesses remained broadly optimistic in the second quarter of 2026, despite high electricity costs, limited access to credit and growing competition from imported goods.

The latest Business Barometer from the Association of Ghana Industries (AGI) recorded a Business Confidence Index of 108.7, slightly down from 109.5 in the first quarter.

An index above 100 indicates that businesses remain optimistic about the outlook.

The AGI said the continued confidence reflected improved macroeconomic stability and growing confidence in the government's economic reform programme.

Businesses expect conditions to improve

The survey found that 42% of businesses reported better performance during the quarter, while 47% said their performance was unchanged.

Only 11% reported a deterioration in their performance.

Businesses were even more positive about the months ahead.

Some 72% expected their performance to improve in the second half of the year, while 26% anticipated no change. Just 2% expected conditions to worsen.

But the optimism comes as businesses continue to face significant operating costs.

Electricity remains biggest concern

The cost of electricity was identified as the biggest challenge, cited by 19% of businesses surveyed.

It was followed by the cost of raw materials at 14%, multiple taxes at 12%, access to credit at 11% and poor roads at 9%.

High electricity costs were the leading concern across manufacturing, services and construction, as well as among small, medium-sized and large businesses.

The AGI said energy-related cost pressures had persisted throughout the quarter, with little immediate relief in sight.

Businesses still struggling to access credit

The report also raised questions about whether increased lending to the private sector is translating into stronger economic activity.

Although private-sector lending has grown, the AGI said businesses were still struggling to access affordable credit.

The problem was particularly pronounced in the construction sector, where access to finance ranked among the three biggest challenges facing companies.

Cheap imports threaten local manufacturers

The AGI also warned that rising imports were putting further pressure on local manufacturers.

It said domestic producers were losing market share because of what it described as an "unbridled influx of imports", as well as smuggling, tax evasion and the misdescription of imported goods.

The association said some products were allegedly being classified as raw materials to benefit from a 5% concessionary import duty instead of the applicable 20% rate.

It also said some traders were avoiding taxes by bringing goods into the country through unapproved routes.

The AGI warned that such practices were contributing to falling capacity utilisation across some domestic industries.

Ghana's wheat flour industry, for example, has an installed production capacity of about 800,000 tonnes a year but is currently producing about 320,000 tonnes - roughly 40% of its capacity.

The report said utilisation in the industry had fallen from 57% in 2021 to 40% in 2024.

The washing powder industry was operating at about 30% of capacity, while vegetable cooking oil production was operating at about 76%.

Inflation pressures return

The survey also pointed to a reversal in Ghana's recent disinflation trend.

Average inflation rose from 3.4% in the first quarter of 2026 to 4.1% in the second quarter.

The AGI linked the increase partly to external pressures, including the conflict in the Middle East.

Despite these challenges, the association said it remained broadly positive about the outlook for the rest of 2026.

It expects continued macroeconomic stability to support business growth, but warned that high energy costs, access to finance and competition from imports could undermine the performance of local industry.

The survey drew responses from businesses across Ghana, with manufacturing and services each accounting for 47% of respondents and construction 6%.

About 90% of the businesses surveyed were small and medium-sized enterprises, with large businesses and so-called African Giants making up the remaining 10%.