Following the International Day of Family Remittances which was recognized on Thursday, June 16th, industry players are optimistic about a higher percentage increase in remittances for Ghana this year following a rebound in economic activities on the global market.
Global remittances, the hard-earned money sent by migrant workers to their family members in low and middle-income countries, grew by 8.6 percent in 2021.
Despite predictions that the COVID-19 pandemic would reduce remittance flows, the momentum was sustained due to a 48 percent increase in money sent through mobile channels, according to a report by the International Fund for Agricultural Development.
Meanwhile, money sent home by over 200 million migrant workers around the world this year is expected to reach US$630 billion.
In Ghana, just like many developing countries, remittances are the most visible forms of immigrants or migrants’ economic contributions to the economies of their home countries as they form a substantial part of several countries’ GDP and help shore up foreign reserves.
Despite the impact of COVID-19 on global economies, remittances to Ghana shot up by 5 percent to US$3.6 billion in 2020, according to World Bank’s 2021 Migration and Development report.
Figures from the Bank of Ghana showed that Ghana received remittances of US$4.5 billion in 2021, representing 6.3 percent of the country’s GDP.
Following this progressive trend, players in the fintech space are optimistic about an even better performance in the coming years.
Speaking on the sidelines of the Disrupt 270 Summit organized to mark the International Day of Family Remittances, the Managing Director of Zeepay, one of the fastest-growing fintech in Ghana, Andrew Takyi-Appiah predicted a 16 percent growth in remittances following a rebound in economic activities on the global market.
“I don’t see remittance figures declining. It didn’t decline in 2008 when we had the meltdown and it didn’t decline when we had COVID-19. It’s going to grow because those in the diaspora are being given a lot more opportunities and their income brackets are going up so they can only contribute more. Also, the enabling policies that the government has put together are allowing for the remittances to be put to proper use here. I’m actually projecting a 10 to 16 percent increase in 2022 and we’re already seeing the signs of it,” he noted.
Sampson Akligoh, the Director of the Financial Sector division at the Finance Ministry, further suggested ways by which remittances can be scaled into other sectors of the economy.
“We must look at how we can leverage remittances as a prerogative for micro insurance so that remittances can purchase micro insurance from abroad directly for their family in Ghana. We must also look at how we can leverage remittances to enable diasporans to invest in Ghana to a simpler product such as ‘remit-invest’ or directly in treasury bills or related instruments. I also think that it’s important for us to link remittance investment to some of the critical sectors that government is working to develop such as the mutual fund industry.”