Ghana’s construction and retail sectors are showing clear signs of softening activity, with new data from the Bank of Ghana revealing a sustained decline in cement sales and weakening retail momentum, even as building costs continue to rise.
The September 2026 Monetary Policy Report shows cumulative cement sales fell by 10.3% in the first seven months of 2026, dropping to 1.48 million tonnes from 1.64 million tonnes in the same period last year. The decline reflects a moderation in construction activity across the country, with the slowdown now stretching into its second quarter.
In July alone, cement sales fell by 4.9% year-on-year to 202,218 tonnes, down from 212,735 tonnes in July 2025. On a month-on-month basis, sales also dipped by 0.6% from the 203,435 tonnes recorded in June, pointing to softer demand across parts of the construction value chain.
The trend has been evident since the start of the year. First-quarter cement sales declined by 10.0% to 636,283 tonnes, compared with 706,709 tonnes in the same period of 2025, according to the Bank of Ghana’s May 2026 Monetary Policy Report.
Retail Activity Loses Momentum
Consumer spending also showed signs of strain in July. Retail sales declined by 1.5% year-on-year to GH¢236.41 million, down from GH¢239.89 million in July 2025. Month-on-month, sales moderated by 0.8% from GH¢238.25 million in June.
Despite the monthly and annual declines, cumulative retail sales for the first seven months of 2026 increased by 2.2% compared with the same period last year, suggesting that retail activity lost some momentum in July rather than entering a sustained contraction.
Domestic VAT collections presented a contrasting picture. Collections rose by 11.5% year-on-year to GH¢2.14 billion in July, while cumulative collections for the seven-month period increased by 13.8% to GH¢13.62 billion. However, the rise in VAT receipts does not necessarily indicate higher sales volumes, as the increase could reflect changes in prices, transaction values, compliance rates, or the composition of taxable spending.
Building Cost Inflation Accelerates
Building cost inflation in Ghana rose to 4.6% in August 2026, up from 4.0% in July, as higher prices for construction materials and plant and equipment added to cost pressures in the sector.
The Prime Building Cost Index (PBCI) from the Ghana Statistical Service rose to 138.4 in August 2026 from 132.3 a year earlier. The index, which is indexed to a 2023 base year, tracks changes in the overall cost of constructing buildings by monitoring the prices of key inputs including materials, labour, and equipment.
Materials remained the biggest contributor to the annual rise in building costs, recording inflation of 5.8% and accounting for 76.5% of the PBCI basket. The category contributed 96.5% of the upward pressure on headline inflation. Labour costs, by contrast, remained in deflation at -2.9%, though this was an improvement from -3.2% in July.
The Ghana Statistical Service identified plant and equipment as an emerging source of cost pressure, with inflation in the category reaching 17.9% in August. At the sub-group level, plumbing recorded the highest year-on-year inflation rate at 26.1%, while steel recorded the lowest at -8.9%. Fourteen of the 23 sub-groups recorded inflation above the national average of 4.6%.
Cement and Iron Rods Drive Market Prices Higher
In September, the Channel One Market Price Barometer showed increases in selected construction materials, particularly cement and iron rods.
The price of a bag of 32.5R cement jumped from GH¢98 to GH¢100, while 42.5R cement rose from GH¢109 to GH¢117. Iron rods increased from GH¢7,300 to GH¢7,500 per tonne, extending the upward movement recorded in August when prices rose from GH¢7,200 to GH¢7,300. Rough sand also increased from GH¢2,700 to GH¢2,800 per double-axle load.
The price increases have been driven in part by a temporary clinker demurrage surcharge introduced by the Chamber of Cement Manufacturers, Ghana (COCMAG) in response to severe congestion at Tema Port. The surcharge, set at GH¢12 per bag (GH¢10 before tax plus GH¢2 in applicable taxes and levies), was implemented after vessel waiting times for clinker rose from an average of seven days in January 2026 to 30–40 days or more in August.
COCMAG estimates that the delays cost the industry between US50 million in demurrage charges during the first eight months of 2026, with individual vessels incurring costs of US1 million. The chamber stressed that the measure is not a general cement price increase but is intended to offset exceptional costs associated with port congestion. The surcharge will remain in place until 31 December 2026, subject to monthly monitoring, with a formal review scheduled for January 2027.
Congestion has been exacerbated by limited facilities for clinker discharge. Only three main berths are currently available, while Berths 10 and 11 remain inaccessible to cement importers and manufacturers. COCMAG has warned that continued congestion could extend clinker shipment cycles to almost three months, potentially disrupting cement supply to the Ghanaian market.
The government has since announced steps to reduce demurrage costs, with the Ghana Ports and Harbours Authority planning to introduce a scheduling system for clinker imports and encouraging manufacturers to secure holding areas near the port to speed up evacuation. The Port of Takoradi has also been suggested as an alternative hub to ease pressure on Tema.
Pressure on Developers and Households
The combination of falling cement sales and rising prices presents a challenging picture for Ghana’s construction sector. Lower sales volumes have not translated into lower prices across the market, leaving cement producers, distributors, and suppliers facing pressure on volumes while consumers contend with elevated costs.
For developers and households working with tight financing, the sustained increase in cement and iron rod prices continues to strain project budgets. The Bank of Ghana’s data suggests that while demand is moderating, the cost environment remains elevated—a dynamic that could weigh on construction activity in the months ahead.
