3rd quarter consumer spending improves

Consumer spending, measured by domestic VAT collections and retail sales, improved in the third quarter of 2020 compared with figures recorded in the corresponding period of 2019.

This was evidenced by domestic VAT collections which increased by 6.5 per cent (year-on-year) to GH¢1,364.72 million, relative to GH¢1,281.65 million collected during the corresponding quarter in 2019. Similarly, domestic VAT grew by 6.6 per cent compared with GH¢1,280.39 million collected for the second quarter of 2020.

Also, retail sales increased by 45.7 per cent (year-on-year) to GH¢286.86 million during the third quarter of 2020 from GH¢196.86 million recorded in the corresponding quarter of 2019. The comparative improvement in retail sales could be attributed to increased household consumption during the review period.

A new report by the Bank of Ghana made these known.

Manufacturing

It said manufacturing-related activities, as measured by trends in the collection of direct taxes (income, corporate, and others) and private sector workers’ contributions to the SSNIT Pension Scheme (Tier-1), posted positive outturns during the third quarter of 2020, compared with what was observed in the same period of 2019. Total direct taxes collected increased by 14.4 per cent (year-on-year) to GH¢5,278.01 million in the third quarter of 2020, relative to GH¢4,613.69 million recorded for the third quarter of 2019. A total direct tax collected for the quarter under review also grew by 5.2 per cent from GH¢5,015.12 million collected in the second quarter of 2020. In terms of contribution of the various sub-tax categories, Corporate Tax accounted for 54.3 per cent, followed by Income Tax (PAYE and self-employed) with 36.2 per cent, while Other Tax sources contributed 9.5 per cent.

Private-sector workers’ SSNIT contributions

Similarly, private-sector workers’ contributions to the SSNIT Pension Scheme (Tier-1) went up by 6.7 per cent (year-on-year) to GH¢560.67 million in the third quarter of 2020, from GH¢525.67 million collected during the corresponding quarter of 2019. Total contribution in the review period also grew marginally by 1.6 per cent when compared with GH¢551.59 million for the second quarter of 2020. The improvement in private workers’ contributions to the Tier-1 pension scheme could be attributed to the registration of new employees as well as improved compliance by private sector employers.

Construction

Economic activity in the construction sub-sector, as measured by the volume of cement sales, improved by 29.2 per cent (year-on-year) during the third quarter of 2020 to 1,056,790.08 tonnes, from 817,744.14 tonnes recorded in the third quarter of 2019. Similarly, total cement sales during the review period increased by 19.0 per cent when compared with 887,734.28 tonnes recorded during the second quarter of 2020. The relative improvement in total cement sales was due to a pick-up in construction activities during the review period.