Data from the Bank of Ghana made available to Citi Business News shows that the flow of remittances into the country went up marginally within the first half of the year, compared to the same period in 2019 despite the impact of COVID-19 on jobs both home and abroad.
The remittances for the first half of the year stands at $2.3 billion as compared to $D2.1 billion in the same period last year.
Since the outbreak of the novel coronavirus in Wuhan, China, in the latter part of 2019, the virus has claimed over 800 thousand lives globally, out of over 23 million cases, although over 16 million infected people have also recovered.
The impact of the disease has been very severe as almost every sector has had its share of the ravaging virus, and the transfer of remittances is no exception.
A remittance refers to money that is sent or transferred to relatives or acquaintances back in a person’s home country via a wire transfer, electronic payment system, mail, draft, or cheque.
In Ghana, just like many developing countries, in particular, remittances are the most visible forms of immigrants or migrants’ economic contributions to the economies of their home countries. At an economy-wide level, they form a substantial part of several countries’ GDP and help shore up foreign reserves.
Prior to COVID-19, remittance flows proved relatively resilient. But checks by Citi Business News amidst the COVID-19 pandemic indicate some changes in the state of remittance flow into the country.
An interaction with Ghanaians abroad showed that although jobs were generally lost in their host countries largely due to lockdown measures, affecting the flow of remittances, not everyone was badly hit.
“Fortunately, I still have my job and I work from home but that hasn’t affected the amount of money I remit home,” Kofi Bentum, a sales manager said.
“I don’t have a job. Our company had to lay off some people and I was part. Though I have some savings I cannot send money home because I have to be financially prudent,” P. K. Dickson, a legal advocate noted.
These views show that obviously the COVID-19 pandemic had some impact on the flow of remittances. But data from the Bank of Ghana indicate that, for the first half of the year, the remittance inflows into the economy performed marginally well.
According to the Bank, the remittances stood at $2.3 billion as compared to $2.1 billion the same time last year.
Also, inward and outward remittances recorded USD 2.2 billion and USD452 million respectively.
Head of Research at Bank of Ghana, Philip Abradu-Otoo, explained further that, “from the perspective of the Bank of Ghana, transfer of remittances have held up. There is no indication that the pandemic has adversely affected the transfer of funds. It has rather been strong as compared to same time last year.”
While throwing more light on the benefit of increased remittances to the economy, Mr. Abradu-Otto said figures from the final two quarters of the year, will give a broader perspective on the real impact of remittances for the year.
His stance was reiterated by the Director of Diaspora Affairs at the Office of the President, Akwasi Awuah Ababio, who says government has put in place measures to support Ghanaians affected by the pandemic.
The Founder and CEO of PayAngel, a Ghanaian owned multichannel remittance and bill payment service provider based in the United Kingdom, Jones Amegbor, confirmed to Citi Business News that although the company saw a decline in remittances sent to Ghana and other countries during the lockdown, it picked up when restrictions started easing, with many using their digital platform instead of walk-ins.
Despite the slight increase in remittances into Ghana within the first half of the amidst COVID-19 pandemic, a World Bank report released on April 22, 2020, said remittances to sub-Saharan Africa decreased by 0.5 percent, between 2018 and 2019, to remain close to $48 billion. The further noted that due to the COVID-19 crisis, remittances are expected to decline by 23.1 percent in 2020 to reach $37 billion, while a recovery of 4.0 percent is expected in 2021.