Ghana’s private sector activity showed signs of slowing at the end of 2024, with the S&P Global Ghana Purchasing Managers’ Index (PMI) dipping to 49.4 in December, down from 52.5 in November.
This marked the first decrease in business activity in three months, attributed in part to the disruptions caused by the country’s December elections.
While business activity declined slightly during the election period, companies remained optimistic about the future. New orders continued to increase, albeit marginally, with some firms benefiting from a stronger cedi that helped secure new business and ease inflationary pressures. The recent strengthening of the local currency against the U.S. dollar resulted in a slower increase in purchase costs, reaching the lowest pace in nine months.
Despite the challenges, employment levels continued to rise for the eleventh consecutive month, though at a more subdued rate. Firms were also active in purchasing materials to build up safety stocks, responding to the increased new orders and a desire to ensure smooth operations.
Looking ahead, business sentiment was notably stronger than in recent months, driven by hopes for a more stable economic environment and positive expectations for government actions. Companies were particularly optimistic about the prospects for 2025, with confidence reaching its highest point in six months.
While inflationary pressures eased slightly due to the cedi’s strength, the rising costs of inputs and wages continued to be a concern for businesses. The outlook for inflation remains mixed, with prices still rising sharply, though at a slower pace. The S&P Global market intelligence team forecasts GDP growth of 4.5% for Ghana in 2025, suggesting a stable economic foundation despite the challenges faced at the close of the previous year.
In conclusion, while the Ghanaian economy saw a temporary dip in activity during the election period, the overall outlook for 2025 remains optimistic, with businesses anticipating growth and inflationary pressures showing signs of easing. The upcoming year is expected to bring renewed stability and potential for recovery in key sectors.
