Ghana’s FMCG Sector Shows Signs of Recovery Amidst Easing Inflationary Pressures – Maverick Research

After a difficult two-year period of economic turbulence, Ghana's fast-moving consumer goods (FMCG) sector is showing signs of recovery, according to the latest Maverick Research FMCG Index. For the first half of 2024, FMCG volumes rose by 4% and value increased by 2%, indicating that inflationary pressures are beginning to ease compared to the previous year. This rebound marks a potential turning point for the sector, which had been weighed down by high inflation and a struggling cedi in 2022 and 2023.

Ghana’s inflation rate has been moderating, and consumers are gradually adjusting to food price increases. One of the key trends highlighted in the Maverick Research report is the shift in consumer behavior towards essential goods. Consumers are purchasing larger quantities of smaller packs, seeing this as a better value proposition. This shift suggests that while inflation has not disappeared, it is no longer accelerating at the same pace, allowing households to make more calculated purchasing decisions.

The report also noted increased consumption of non-alcoholic beverages in the first half of 2024. This growth has been fueled by pack-size innovations and aggressive retail promotions by energy drink brands, as well as the entrance of new players in the ready-to-drink (RTD) market. These changes have boosted the performance of the non-alcoholic beverages sector, providing some relief to a market that had previously seen stagnation.

However, the home and personal care categories continue to face challenges. "Down-weighting and ongoing price hikes are extending consumers' purchase cycles for these items," said Ato Micah, Managing Principal at Maverick Research. "Outlet owners and consumers are increasingly fatigued by the trend of down-weighting, as smaller SKUs often fail to meet the volume and distribution needs of the products they replaced."

Maverick Research’s data covers 60 FMCG segments, tracking 15,000 Stock Keeping Units (SKUs) monthly across Ghana, Côte d'Ivoire, and Cameroon. The firm’s latest findings offer a nuanced view of Ghana's recovering economy, which, despite recent improvements, remains vulnerable to global shocks and currency fluctuations. The cedi’s persistent depreciation against the U.S. dollar continues to put pressure on imported goods, although the impact has lessened in sectors where local production dominates.

In the broader context, Ghana’s economic performance in 2024 has been a mixed bag. While inflation has slowed, the cedi’s depreciation and high borrowing costs have continued to affect businesses and consumers alike. The IMF's recent $3 billion bailout program for Ghana has provided some stability, but structural issues such as fiscal deficits and debt management remain significant challenges for the government. Against this backdrop, the FMCG sector’s modest recovery offers a glimmer of hope that some parts of the economy are beginning to stabilize, though the road ahead remains uncertain.

For FMCG brands, the road to sustained recovery will depend on continued innovation, particularly in pricing strategies and product sizes. As consumers prioritize value for money, companies will need to find a balance between price adjustments and maintaining product quality. Additionally, brands will need to remain agile, responding to evolving consumer preferences as Ghana’s macroeconomic environment continues to shift.

Despite the challenges, the resilience of Ghana’s FMCG sector—along with innovative efforts from companies within the market—may serve as a key indicator of broader economic recovery in the months to come.