Bank of Ghana Report Reveals Mixed Q1 2026 Performance: Manufacturing Taxes Surge as Construction and Retail Face Headwinds

Ghana’s economic landscape in the first quarter of 2026 presented a complex picture of growth and contraction, according to the Bank of Ghana’s May 2026 Monetary Policy Report. While fiscal indicators such as Value Added Tax (VAT) and direct tax collections from the manufacturing sector showed robust year-on-year increases, consumer-facing sectors like retail and construction faced significant headwinds. The data suggests an economy in a state of transition, with strong industrial revenue performance contrasted by cautious domestic consumption and a slowdown in infrastructure development.

The manufacturing sector emerged as a primary driver of fiscal growth during this period. Total direct taxes collected rose by 40.6% year-on-year to GH¢12.269 billion in March 2026. This upward trajectory was sustained throughout the first quarter, with cumulative direct taxes rising 20.4% to reach GH¢22.830 billion. Similarly, domestic VAT collections—a key proxy for broader economic activity—surged by 35.7% year-on-year to GH¢2.064 billion in March. For the entirety of Q1 2026, total domestic VAT collections reached GH¢5.818 billion, representing a 20.8% increase compared to the same period in the previous year.

In contrast to the strong tax revenue figures, actual retail activity and the construction sector experienced notable year-on-year declines. Retail sales in March 2026 dipped by 1.9% compared to March 2025, totaling GH¢262.84 million. However, a month-on-month analysis offered a more optimistic perspective, showing a 13.2% increase from February 2026, which may signal a late-quarter recovery in consumer confidence. The construction sector struggled more significantly, as cement sales—a vital barometer for building activity—fell by 10.7% year-on-year to 226,629.10 tonnes. Cumulative cement sales for the first quarter were down by 10.0% overall, reflecting a cooling in real estate and infrastructure projects.

Ultimately, the Bank of Ghana’s findings underscore a period of mixed economic signals for the nation. While the surge in tax collections points to improved efficiency in revenue mobilization and a resilient manufacturing core, the contraction in cement volumes and soft retail growth highlight the ongoing challenges facing the construction industry and the domestic consumer. As the year progresses, the central bank and economic observers will be monitoring whether the month-on-month improvements seen in late Q1 can be sustained to drive a more uniform recovery across all sectors.