New data released by the Bank of Ghana indicates that some selected real sector indicators showed improvements in economic activity in the first quarter of 2020 in spite of the general downturn in economic activity as a result of the negative impact of COVID-19 on the real sector.
The real Sector comprises households, non-financial organisations and Non-Profit Institutions Serving Households involved in the production and distribution of goods and services necessary to meet the consumption demand of an economy.
Giving more details, the document titled The Bank of Ghana Quarterly Bulletin, January to March 2020, stated that a review of selected indicators of economic activity revealed an improvement in the domestic economy during the first quarter of 2020, compared with trends observed during the first quarter of 2019.
“Economic indicators such as consumer spending, vehicle registration and industry consumption of electricity went up but tourists’ arrivals and port activities declined during the review quarter mainly as a result of the closure of the borders and the lockdown,” the statement noted.
Consumer spending, which was measured by domestic VAT collections and retail sales, improved in the first quarter of 2020, compared with figures recorded in the corresponding period of 2019.
“Domestic VAT collections grew by 4.5 percent, year-on-year, to GH¢1,182.25 million relative to GH¢1,131.40 million collected during the same quarter in 2019. Domestic VAT collections however decreased by 28.6 percent when compared with GH¢1,655.80 million collected for the fourth quarter of 2019,” the statement noted.
Retail sales increased by 39.9 percent (year-on-year) to GH¢236.85 million during the first quarter of 2020 from GH¢169.34 million registered in the corresponding quarter of 2019.
The comparative improvement in retail sales could be attributed to increased household consumption during the review period.
However, manufacturing-related activity, 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 mixed out turns during the first quarter of 2020, compared with what was observed in the same period of 2019.
“Also, total direct taxes collected declined by 4.89 per cent (yearon-year) to GH¢4,113.91 million in the first quarter of 2020, relative to GH¢4,325.59 million recorded during the same quarter of 2019. Similarly, total direct tax collected for the quarter under review dropped by 50.8 per cent from GH¢8,357.44 million collected in the fourth quarter of 2019,” the statement added.