Remittances fetch $28bn in 10 years - Experts call for measures to leverage inflow
A banking consultant, Dr Richmond Atuahene, has indicated that Ghana’s economic lifeline flows from the millions of Ghanaians living abroad who sent in $28 billion remittances over the last 10 years, surpassing the country’s earnings from the export of gold, cocoa and oil.
Although gold and oil exports over the last decade have totalled about $55 billion and $34 billion respectively, the surrendered value that comes to the Bank of Ghana for balance of payment support is far less than this amount, with a chunk of this money going directly to the investors who have committed resources into the industries.
Cocoa exports in the last 10 years have brought in about $25 billion.
In 2023 alone, inward remittances brought in $4.8 billion, which was more than double of the $2.15 billion from cocoa and almost five times of the surrendered value of $1 billion from gold exports.
Super gold
Speaking at the Graphic Business/Stanbic Bank Breakfast Meeting in Accra yesterday held on the theme: “The Remittance System — Impact on the Economy”, Dr Atuahene described remittances as the “super gold” of the country.
“It is super gold because it is bringing in more than what we are getting from gold and cocoa combined, and it doesn’t destroy the environment as well,” he said.
He said an analysis of the Auditor-General’s report from 2014 to 2023 indicated that the surrendered value from the country’s gold exports in the last 10 years amounted to just about $7.6 billion, out of the over $50 billion exports.
“So gold is not something we should celebrate for its contribution. If the remittance systems is well structured, captured and traced, it will have a much more significant impact on the economy in terms of helping to stabilise the local currency,” he stated.
Dr Atuahene said there was, therefore, the need to develop competences to track remittances, citing Bangladesh and Dubai who rely largely on remittances as their major source of foreign exchange.
He said when channelled properly through the banks, remittances would support trade and payments in the country, and also support the stability of the cedi.
Remittance inflows
Dr Atuahene advised the government to establish a separate institution or department with people who had the technical capacity and knowledge to track and monitor remittance inflows in the country.
He said the Bank of Ghana must also develop competences to be able to track all the remittances that went through financial technology (fintechs) systems.
“About GH₵57 billion was brought in from the fintechs in 2023, but ask yourself how much went to the central bank; nothing,“ he said.
He said the country would benefit more if the central bank was able to capture all the remittances that came through the fintechs.
Steady flow of Forex
The Head of Personal and Private Banking at Stanbic Bank Ghana, Reynell Badoe, added that remittances were structured in a way that provided a steady flow of foreign exchange to any economy.
He pointed out that Ghana was second only to Nigeria when it came to remittances in Sub-Saharan Africa.
“As a country, we sought help from the International Monetary Fund, and we are looking at getting $3 billion over three years, but in 2023 alone, remittances brought in $4.8 billion,” Mr Badoe said.
“This tells you how significant the business of remittance is,” he added.
Mr Badoe, however, pointed out that the regulatory environment was stifling the growth of remittances in the country.
“Even though the funds are coming into the country, it doesn’t see the shores of the country due to the cost of compliance. A lot of partners are looking for easier and cheaper ways to send their monies without bearing the full cost of it.
“So, we have the funds coming in but they find a way to turn the cedi equivalent in-country while the forex itself is exchanged outside the country,” the banker explained.
Mr Badoe, therefore, called on policymakers to create an enabling environment that would allow businesses to thrive and comply.