Business sentiment still low despite economic recovery signs
The nation’s business sentiment remains in contractionary territory, although economic conditions are showing signs of improvement, according to the World Bank’s October 2025 Africa’s Pulse Report.
The report noted that Ghana’s Purchasing Managers Index (PMI), a key gauge of private sector performance, inched up slightly from 50.2 in July 2025 to 50.8 in August 2025, indicating a gradual improvement in business activity and confidence.
According to the Bretton Woods institution, the uptick was largely driven by new orders and sustained job creation, even though output was slightly affected by poor weather conditions during the review period.
“Unusually poor weather conditions led to a modest decline in output, although companies remained optimistic about future business. New business and sales orders continued to increase as reduced input costs and output prices were supported by a stronger cedi,” the report stated.
The World Bank added that the improving business sentiment was further supported by a steady decline in consumer inflation, which has helped ease cost pressures for firms.
Inflation dropped for the seventh consecutive month, reaching 12.1 percent year-on-year in July 2025, down sharply from 23.8 percent in December 2024.
The Bank observed that lower input prices and a relatively stable exchange rate helped firms manage costs more effectively, while also supporting higher sales volumes.
Regional Comparison
The Africa Pulse Report highlighted that leading indicators across sub-Saharan Africa point to mixed business sentiment.
While manufacturing and services activity has improved in most economies, the pace of expansion has slowed compared to the first half of the year.
“High-frequency indicators suggest that business activity in manufacturing and services across countries in the region continued improving in August, although at a slower pace compared to the first five months of the year,” the report said.
The World Bank attributed this regional improvement to robust domestic demand, which has driven an increase in new orders and production across several countries. Declining input costs, as inflationary pressures ease, have also supported business expansion.
However, it cautioned that export-driven economies face mixed conditions due to shifting global trade dynamics, including anticipated tariff adjustments and concerns about weakening external demand.
Country Comparisons
The report further revealed that business sentiment remains diverse across African economies.
“It continues to expand in some countries such as Nigeria and Uganda, while in others, including Mozambique, South Africa and Zambia, it has bounced back from contraction. However, in Kenya and Ghana, business sentiment remains in contractionary territory,” the World Bank noted.
Despite this, the Bank emphasised that Ghana’s private sector outlook remains largely positive, buoyed by stabilising inflation, improving currency performance and renewed investor confidence following fiscal consolidation measures and easing financing conditions. The World Bank urged policymakers to sustain reforms that enhance private sector competitiveness and productivity, noting that a stable macroeconomic environment remains key to sustaining growth and employment creation in the coming quarters.
