What will drive post-pandemic growth in Ghana's retail sector?

Ghana’s retail sector has expanded in recent years, bolstered by rising living standards, and lower levels of unemployment and inflation. Taken together, these factors improved consumer confidence and supported customers’ purchasing power. This trend continued into 2021, despite a modest slowdown in response to the Covid-19 pandemic when social-distancing measures resulted in falling foot traffic in shopping venues around the world. The continued expansion of e-commerce, consumer spending and household consumption is expected to drive retail growth, and has the potential to support the country’s long-term economic recovery.

Structure & Oversight

The retail sector is fragmented, with many companies and traders operating across formal and traditional markets. Traditional and informal trade dominates retail sales, accounting for approximately 90% of the market, particularly outside of major city centres. However, formal retailers are playing an increasingly important role as larger local and foreign investors have sought retail space, supported by rising levels of investment and urbanisation, as well as a growing middle class with shifting preferences.

The Domestic Trade and Regional Office Directorate of the Ministry of Trade and Industry (MoTI) is a major player in the sector, and is responsible for implementing domestic retail infrastructure, which is part of the ministry’s 10-point Industrial Transformation Agenda. Through the programme, the MoTI aims to achieve compliance with legislation and regulations, and develop modern markets and retail infrastructure in each district. Key initiatives under the programme include developing physical retail spaces, establishing a commodity exchange, enhancing craft villages, ensuring consumer protection and promoting locally manufactured goods.


Ghana is one of the world’s fastest-growing economies, expanding by 6.5% in 2019 and 0.7% in 2020 despite the pandemic. Even within 2020 the country experienced a quick rebound: following contractions in the second and third quarters, real GDP recovered to 3.3% year-on-year (y-o-y) growth in the fourth quarter as health restrictions were eased. The retail market benefitted from this improved performance, as it fuelled consumer spending. In turn, higher levels of consumer spending helped further boost the recovery as retail and wholesale trade continues to expand. This trend is expected to continue in the coming years, with the World Bank forecasting an annual average growth rate of 5.1% between 2021 and 2023.

Macro Indicators

Ghana’s purchasing power has improved steadily over the last half decade. Per capita GDP, adjusted for purchasing power parity, rose from $2970 in 2010 to $5740 in 2020, according to the World Bank. Indeed, since 2018 Ghana has outperformed both Nigeria – the largest economy on the continent – and the sub-Saharan African region in terms of GDP per capita. In 2018 Nigeria’s GDP per capita measured in at $5280 – compared to $5440 in Ghana – and by 2020 it had fallen to $5180. Sub-Saharan Africa, for its part, had a GDP per capita of $3900 in 2020.

Growth in per capita GDP has supported an expansion of the middle class and increased domestic demand. As in most African countries, Ghana is experiencing rapid urbanisation as the middle class continues to grow. When Accra Mall, the first major shopping centre in the capital city, was developed in 2007 the country’s urbanisation rate stood at 48.7%. By 2020 this figure reached 57.3%, spurring an increase in the number of shopping malls and organised markets. The distribution of economic expansion has also been relatively equal, as Ghana’s Gini coefficient – a measure of inequality – remains among the lowest in sub-Saharan Africa, at 43.5 in 2016, according to the most recent World Bank estimate. This has supported a reduction in poverty, and indicates a greater spread of wealth and spending power among the population.

While GDP indicators have improved, the cost of living reflected in the consumer price index (CPI) has increased, dampening spending power. Annual consumer price inflation reached 9.9% in 2020, although it has fluctuated since 2010. The CPI stood at 17.5% in 2016 before falling to 7.1% in 2019 – within the target range of 6-10% set by the Bank of Ghana (BoG), the country’s central bank. In 2021 headline inflation increased to 10.3% in March, falling to 7.5% in May and returning to the upper end of the target range in August, at 9.7%, due to fluctuations in food prices, according to the most recent report from the BoG, published in September 2021.


The consumer confidence index, which stood at a relatively optimistic level of 102.8 in December 2020, fell to a low that year of 88.8 in June. The central bank suggested that revenue measures announced in the national budget in March 2021 could have softened consumer optimism in the first half of the year. The measures comprised the introduction of four new levies, including a 1% Covid-19 health levy on goods and services, and an increase in value-added tax from 3% to 4%. Consumer confidence later improved to 91.8% in August and 95.5% in October of that year, reflecting positive sentiment supported by a recovery in economic activity.

Even so, the business confidence index fell, from 96.3 in June 2021 to 93.2 in August, before a slight recovery to 95.5 in October of that year. This came as businesses were unable to meet short-term targets due to high costs, the unavailability of raw materials, strains on consumer demand and rising labour costs. Widespread vaccinations and improvements in the labour market are likely to encourage buoyancy and consumption growth in the short to medium term.

E-levy & Mobile Money

In November 2021 the Ministry of Finance announced that an electronic transactions levy of 1.75% would take effect on February 1, 2022, although criticism has seen this lowered to 1.5% and it remained under review by Parliament as of February 2022. If passed, the levy will apply to electronic transactions including mobile money, inward remittances, bank transfers and merchant payments, widening the tax net by capturing payments made in the informal sector. This would be a significant development, as the informal market constitutes the majority of the urban economy, as well as the fact that many locals use mobile money for payments, transfers and remittances.

Several initiatives have supported the use of mobile money in the formal and informal retail market as digital transactions expanded during the pandemic (see analysis). The mobile money market in Ghana was estimated to be worth $99bn in 2020, and the market has shown steady growth into 2021. In February 2020 the BoG recorded 193m mobile money transactions valued at GHS30.1bn ($5.1bn). By February 2021 these figures increased to 295m transactions, with the value of transactions more than doubling to GHS67.9bn ($11.6bn).

Sales & Spending

Formal retail sales increased by 61.5% to GHS115.5m ($19.7m) in January 2021, up from pre-pandemic levels of GHS71.5m ($12.2m) recorded in January the previous year. By July 2021 monthly retail sales figures stood at GHS111m ($19m), an 18.6% y-o-y increase from GHS93.6m ($16m). In the first seven months of the year retail sales grew by 33% to reach GHS780.9m ($133.5m).

Improvements in retail sales were primarily linked to increased household consumption during the first half of the year, according to the BoG. This trend is expected to continue into the future, with a September 2021 report from research firm Fitch Solutions forecasting a 4.4% increase in household spending for 2021, following a 1.1% contraction in 2020. Higher levels of spending followed the easing for social-distancing restrictions, and the normalisation of formal and informal business activities. Fitch noted, however, that a resurgence of Covid-19 cases and the country’s relatively low vaccination rate poses downside risks for consumer spending.

Retail Space

Space within Ghana’s formal retail market is primarily located within medium and large malls situated in the biggest cities. The formal market offered an estimated 144,105 sq metres of retail property in the first half of 2021, up from 126,377 sq metres in 2019, according to figures published by property group Broll. Approximately 13,000 sq metres of stock was opened to retailers in 2020 following the development of the Oyarifa Mall and City Galleria in Accra, while 60,000 sq metres was under development in the first half of 2021.

The Oyarifa Mall, which opened its doors in December 2020, is the first commercial retail centre to serve the town of Oyarifa and neighbouring suburbs including Adenta and Aburi. The mall was privately developed and includes a grocery store, restaurants, cafes and a food court. A lifestyle centre forms part of the development, and includes fashion, home good and furniture retailers.

The City Galleria is a mixed-use development near Kotoka International Airport, offering 6200 sq metres of commercial office space and 2700 sq metres of retail. The new development is located behind Accra Mall, which is among Ghana’s more established stock. Accra Mall opened in 2007 offering 20,000 sq metres of grade-A retail space, with retailers Game and Shoprite serving as anchor tenants. The mall houses 65 shops and nine restaurants in its current configuration, and attracts approximately 7m visitors per year. However, many Ghanaians visit malls for sightseeing, which could distort mall activity figures. Developments in the pipeline include Garden City Mall in Kumasi, with 20,000 sq metres of retail space, and the World, a 30,000-sq metre development in Accra.

Rental Market

Rents for prime retail space have remained largely unchanged since 2019. During the first half of 2021 prime rental rates averaged $20-40 per sq metre a month, with average yields ranging from 8-12%. Rental prices have fallen from a range of $40-70 per sq metre per month in 2018 to $20-40 in 2019, where it remained through early 2022. While supply increased in the years since 2018, demand at the higher end of the price bracket fell.

Market dynamics are generally considered favourable for tenants. Broll reported that as leases came up for renewal in 2019, landlords were ready to offer rent reductions, shorter leases and pop-up deals that would allow retailers to test the market. These conditions continued as the pandemic led to further reductions in demand for retail space in 2020. A significant decrease in foot traffic in response to lockdown measures led to greater flexibility in rental payment agreements. The first half of 2021 saw an uptick in foot traffic, approaching pre-pandemic levels and supporting lease renewals, albeit with – at times – negligible rental increases.

Vacancy Rates

Vacancy rates varied widely across prime-grade malls in 2021. More established and larger centres, such as Accra Mall, A&C Mall (30,000 sq metres) and the Junction (11,511 sq metres), have negligible vacancy rates of 2-5%. However, vacancies at Marina Mall (3250 sq metres) and Westhills Mall (27,000 sq metres) sat at around 20%.

There are also varying vacancy rates outside the capital. Kumasi City Mall, which spans 18,000 sq metres and is located in Ghana’s second-largest city, had a vacancy rate of 10%. Meanwhile, Takoradi Mall, covering 11,000 sq metres, anchored by Shoprite and located in oil-rich Sekondi-Takoradi in the Western Region of Ghana, recorded the highest vacancy rate among grade-A retail property, at 59%.

Vacancy patterns in Ghana’s malls have remained largely unchanged since 2018, when average vacancies stood at 20% among prime retail property, and showed similar variations of 5-50%. Higher vacancy rates are typically found in older, more depreciated stock, which tend to be less popular with consumers. However, this can also be the case in newer malls such as Takoradi Mall, that are located in smaller cities. Less formal retail remains dominant in these areas, and, as such, attracting retailers to shopping centres has proven to be more challenging.

Outside of the capital city, marketplaces and shopping districts such as Market Square in Takoradi are often centrally located and attract significant foot traffic for less formal retail activity. Traditional buying patterns that favour informal trade have encouraged retailers and banks to typically convert and operate from nearby residential properties within proximity to these districts to be more accessible to customers. While this may impact vacancy rates in the short term, retail property developers are likely to see greater foot traffic as urbanisation rises and buying patterns change.


Ghana’s most established and wellknown domestic retailers include Melcom, Palace and Max Mart. Melcom, which was established in 1989, is the largest chain of retail department stores, and operates 38 stores across the country. Palace, which started as a 1500-sq metre department store in 2005, has five outlets in Accra and one in Kumasi. The company transitioned from anchor tenant to develop its own mall, the Palms Square centre in Accra. Max Mart was created in 2001 and operates five supermarkets, also in the capital.

Large regional retailers including Pick n Pay, Shoprite, Game and Mr Price tend to serve as key anchors in grade-A retail space. The Ghana Investment Promotion Centre Act 2013 restricts foreign investment in the retail sector by requiring a minimum start-up capital investment of $1m. Consequently, smaller retailers from neighbouring African countries have failed to meet the minimum requirements to set up operations, while those from more established markets have gained dominant positions. Nonetheless, the success of these retailers – mainly from South Africa – is often dependent on conditions at home. In 2019 several retailers exited the Ghanaian market as their environment at home deteriorated.

Other firms are entering the market. In 2021 Dutch multinational SPAR announced its expansion into Ghana after acquiring 17 Citydia Supermarket stores. According to the supermarket group, the move was driven by the rising popularity of the brand in the 10 African countries in which it operates, as well as promising prospects in the Ghanaian market.


The e-commerce ecosystem features a range of players, including brick-and-motor retailers with online stores, marketplace sites such as Jumia, and online retailers. The industry’s growth has been supported by high mobile penetration rates, falling data costs, the popularity of mobile money and the implementation of a national digital address system. Key opportunities lie in last-mile deliveries to support e-commerce, with the potential for local couriers to support last-mile delivery on behalf of couriers and e-commerce platforms, according to the e-Commerce Association of Ghana.


Ghana’s retail sector successfully navigated the global economic slowdown spurred by the pandemic, and recovered by 2021. This helped to foster wider growth. Looking ahead, investors in malls and retail outlets appear confident that strong macroeconomic conditions, urbanisation and a growing middle class will continue to support the sector’s expansion over the medium to long term.

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The Report: Ghana 2022

Industry & Retail chapter from The Report: Ghana 2022

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