Business confidence in Ghana remained relatively strong in the second quarter of 2026, despite persistent cost pressures, limited access to credit and growing competition from imported goods.

The Association of Ghana Industries’ (AGI) latest Business Barometer recorded a Business Confidence Index of 108.7 in Q2 2026, marginally lower than the 109.5 recorded in the first quarter.

According to the AGI, the index above 100 reflects continued optimism among businesses, supported by improved macroeconomic stability and confidence in the government’s economic reform agenda.

The survey found that 42% of businesses reported improved performance during the quarter, while 47% said their performance remained unchanged. About 11% reported deterioration in their performance.

Businesses were also largely optimistic about the outlook, with 72% expecting their performance to improve, 26% anticipating no change and only 2% expecting conditions to worsen.

Electricity costs top business concerns

However, the survey identified the high cost of electricity as the biggest challenge facing businesses, cited by 19% of respondents.

This was followed by the high cost of raw materials at 14%, multiplicity of taxes at 12%, access to credit at 11% and deplorable roads at 9%.

The high cost of electricity emerged as the leading concern across manufacturing, services and construction, as well as among small, medium and large businesses.

AGI said electricity-related cost pressures persisted throughout the quarter, with no immediate indication of relief for businesses.

Credit constraints persist

The association also raised concerns about the ability of increased private-sector lending to translate into stronger activity in the real economy.

While lending to the private sector has increased, AGI said the expansion has yet to translate into tangible benefits for the real sector, with access to credit continuing to be a significant constraint.

The concern was particularly reflected among construction businesses, where access to credit ranked among the top three challenges.

Imports threaten local production

Another major concern highlighted by the report is the growing influx of imported goods and its impact on domestic manufacturing.

AGI said local producers are losing market share due to what it describes as an “unbridled influx of imports” and unfair trade practices.

The association cited smuggling, tax evasion and import misdescription among the factors contributing to the problem.

It said some imported goods are allegedly being misclassified as raw materials to attract a lower 5% concessionary duty rate instead of the applicable 20% rate, while some traders evade taxes through unapproved routes.

AGI warned that these practices are contributing to declining capacity utilisation in several domestic industries.

For example, the report shows that Ghana’s wheat flour industry has an installed production capacity of about 800,000 metric tonnes per year, against current production capacity of just 320,000 metric tonnes, representing utilisation of about 40%.

Capacity utilisation in the sector has also fallen from 57% in 2021 to 40% in 2024, according to the report.

The situation is similar in other industries. The washing powder industry, for instance, has an estimated capacity utilisation rate of only 30%, while vegetable cooking oil production is operating at about 76% of capacity.

Inflationary pressures return

The AGI Business Barometer also noted a reversal in the disinflation trend during the quarter.

Average inflation increased from 3.4% in Q1 2026 to 4.1% in Q2, with the association pointing to the ongoing conflict in the Middle East as one of the factors driving the increase.

Despite these external risks and domestic cost pressures, AGI said the outlook for the second half of the year remains broadly positive.

The association expects continued macroeconomic stability to provide further impetus for business growth, although high energy costs, access to finance and import competition remain key risks to the performance of local industry.

The Q2 2026 Business Barometer was based on responses from businesses across Ghana, with manufacturing and services each accounting for 47% of the sample and construction accounting for 6%. About 90% of respondents were SMEs, while large businesses and African Giants accounted for 10%.