Remittance inflows to Ghana are expected to reach about US$5 billion in 2023, slightly easing the pressure on the country’s forex.
In 2022, the value of remittances to Ghana grew throughout the year to reach a record US$4.7 billion despite the cost-of-living crisis, an indication of the eagerness by Ghanaians abroad to alleviate the financial situation of their families back home.
This inflow is expected to transform the lives of Ghanaians, with studies showing that remittances reduce the level, depth, and severity of poverty throughout the country.
Darryl Pietersen, Director of Anglophone Africa, WorldRemit, said the increasing trend of remittances would continue as digital remittance technologies and services gain preference.
“At WorldRemit, we are seeing an increase in the number of tech-savvy consumers of remittance services who prefer the convenience, speed, and security that digital transfers offer.”
Globally, things are expected to improve in the second half of 2023. Most projections show that the dramatic inflation will decrease, driving an even larger rise in remittance inflows into Ghana,” he said.
On the impact of Digital technologies on remittances inflow in Ghana, Darryl Pietersen said one in five Ghanaians relied on remittances for their daily expenses, with studies showing that remittances increase the household ability of Ghanaians to buy food, improve their housing, and sustain their children’s education.
“Indeed, remittances significantly accelerate poverty reduction in Ghana, where about 6.8 million people live below the poverty line, with multidimensional poverty reaching 64.6% in rural and 27% in urban areas, respectively.
Digital remittance technologies are quickly expanding across the country, providing more secure avenues for the Ghanaian diaspora to contribute to the national fight against poverty.”
The beauty of digitalization is that it leads to the quickening of remittance processes that would traditionally take days and weeks while keeping the associated costs down.
For example, in most cases, it takes under five minutes for funds to securely travel from most parts of the world to recipients in Ghana using WorldRemit’s digital platforms.
Continued innovation will bring even more changes to the sector.
We expect this to keep lowering the costs for users of digital remittance services and, ultimately, increasing the value of remittances in Ghana and the rest of the developing world.
He said throughout the COVID period, WorldRemit had supported its customers by minimizing transaction costs, allowing them to maximize the amount sent and received.
“Our investment in digital technologies and partnerships has also helped keep our operations fluid and support our clients’ remittance needs – however, they want to receive money,” he added.
Mr Pietersen said that overall digital remittance technologies were transforming Ghana’s socio-economic prospects by providing an opportunity for financial inclusion, unlike before.
“We see the rapid transformation of villages as Ghanaians working abroad can quickly send home money for development, upkeep, education, and emergencies like hospital bills. This trend is expected to continue in the coming years, and we foresee more advancements linked to the rise of related digital products like savings and investment apps,” he added.
The World Bank recognizes remittances as critical in helping countries adjust to macroeconomic policy shocks and allow low-income families to access good health care and education services.
In 2022, remittance inflows to low-and middle-income countries increased to US$626 billion, up from US$597 billion in 2021, outpacing the flow of foreign direct investment.
GNA