Basically, the projected increase in household spending means that more Ghanaian households will have more disposable incomes to purchase food, drinks and other consumables. And a lot of these items will most likely be purchased at formal grocery shops, as Ghanaians look out for shopping incentives.
In the meantime, the report pointed out that the projected increase in household spending will be threatened by Ghana’s ‘stubbornly high’ inflation rate. Seeing as the country’s inflation rate is forecast at 8.7% per annum over the medium term, households might still need to prioritise their spending.
“Looking ahead, we forecast disposable income growth to remain positive over the medium term, expanding by an annual average of 8.3% a year, reaching GHS44,697 (USD6,695) in 2025. However, we do note that the inflation rate in the country is stubbornly high, impacting the real gains in disposable incomes. At a forecasted average annual inflation rate at 8.7% over the medium term, match nominal income growth, households in Ghana will remain price sensitive and will continue to prioritise essential spending categories over this period. With food and non-alcoholic drinks being the largest portion of household budgets, we believe there is potential for the consumer to shift into formal MGR, looking for deals and the lower prices that supermarkets will offer to lure in consumers,” said a part of the report by Fitch Solutions.
As it is the case in many countries in Sub Saharan Africa, large portions of household spending in Ghana go towards the purchase of food and drinks. And in line with the country’s growing urban population, there has been increasing patronage of mass grocery retail outlets in the country. Fitch Solutions expects this trend to continue over the coming years. And this will present a positive outlook for malls and supermarkets in the West African country.
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