Ghana Remittance: Current Situation and Predictions

Remittance is a crucial income for a large number of people living in Ghana. Ghanaians work abroad, mostly in southern Europe, the UK, Canada, and in the USA to earn foreign currency that they will then send back home. These dollars, pounds and euros are sent through international money transfer companies like Ria Money Transfer and it goes toward a number of essential needs, for example paying school fees, saving for the children’s tertiary education, paying off mortgages, or simply contributing to daily expenses of their families back home.

Working in a foreign country and sending remittance back home in Ghana is a highly stressful situation for many Ghanaians. Being far away already puts pressure on spousal relationships and it is intensified when these workers are absent during the formative years of their children. Yet most of the time this is the only or the best option for earning enough money to care for their families. The work Ghanaians will typically perform abroad is construction and physical labor, ranging between eight and ten hours a day.

Current remittance received

During 2015, the World Bank calculated that Ghana received almost $5 billion in remittance. This is 13% of the country’s GDP (Gross Domestic Product). This is an astounding increase from the previous year’s $2 billion received in remittance. While the country saw a slight drop in earnings from remittance during 2013, the overall picture shows that remittance to Ghana has steadily increased since the 1980s with a rapid increase since 2010. Before 2010, remittance averaged between $500 000 and $1 million.

The World Bank has not yet released the data for 2016, but the prediction is that a further increase will be seen.

Illegal remittance remains an obstacle

Although all remittance to Ghana is legally required to flow through the bank, this is not always the case. A network of informal transfer agencies help Ghanaians send their money back home, side stepping the law. These workers choose to avoid the official channels for a range of different reasons. Often times, money is also transport into Ghana in the form of cash, which is carried on the flights heading into the country.

One reason for the illegal transfers taking place could be that there is currently no reliable tracking system established within Ghana to monitor the amount of money that flows into the country from remittance. In 2013 there were talks about establishing a better system that would pick up on illegal money transfers made from abroad. It does not seem as if such a system has been put into place yet.

This illegal activity is not for a lack of choice. The banks of Ghana currently make it possible for Ghanaians abroad to transfer money through a range of official channels. The companies operating in the country are MoneyGram, Western Union, Ria Money Transfer, Small World, Transfast, and Money Exchange. A range of option regarding pricing, storefront collections, and timeframes is therefore available to expats.

Ecobank Ghana partners with Ria Financial

To make remittance easier yet, Ria announced early in March 2017 that they are launching a new partnership with Ecobank Ghana. The partnership was established in order for Ghanaians to more easily be able to transfer money back home without having to take illegal steps. Ria is currently the biggest supplier of international financial services in Ghana.

Customers do not have to be in possession of an Ecobank bank account in order to use this service. Both account and non-account holders can use this service, and are offered two ways of receiving money – either by having it transferred directly into their bank accounts, or by collecting cash transfers at any of the bank’s 77 branches or 167 sub-agent locations across Ghana. This certainly gives customers a wide range of options and makes it accessible even to those living in rural areas or those who don’t have bank accounts.

Digital remittance is crucial to African countries

While the majority of digital banking in Africa is done with mobile phones, it is crucial that international money transfer services give customers the option to send and receive remittance via their mobile device. Ecobank Ghana recently launched a mobile app that will also allow expats to send money home, and for Ghanaians to receive money, through the app. This clever move could be the deciding factor for many Ghanians when considering their options for international money transfer.

Ecobank’s pan-African footprint

Ecobank is a sound partner for the international company, Ria, because it too has a footprint beyond Ghana. El Hadji Malick Seck, Managing Director for Ria Africa, stated at the official ceremony that Ecobank Ghana was able to learn from their sister bank in Senegal. “A key driver of the growth of Ecobank Senegal has been their good partnerships with sub-agents to expand their network coverage, a strategy we are already witnessing today,” said Seck.

Convenience is key for successful, legal remittance

In his press statement, Daniel Sackey, Managing Director for Ecobank Ghana and Regional Executive, said “We are excited about this partnership, as it affords us the opportunity to bring convenience to the numerous Ghanaian patrons of funds transfer services”.

The only way in which local banks will attract patrons in following the official channels when sending money across borders, is if they make it more convenient than the hassle and stress of using illegitimate channels. Predictions for the coming year in remittance for Ghana is that it will continue to increase. Government is also encouraged to find ways of more easily pinpointing illegal transfers into the country.