Saved by the payangel – The state of remittances in Sub-Saharan Africa [Article]

Ghana is the second-largest remittances receiver in Sub-Saharan African after Nigeria with an financial reliance of USD 4,054 Million (Inflows), representing 6.1% of Ghana’s GDP (Financial institution of Ghana, 2019, World Financial institution 2019).

That is due to a big, well-dispersed diaspora and a thriving digital surroundings, creating alternatives to scale back prices and improve monetary inclusion.

Additionally, the typical price of sending cash to Ghana stood at 6.4% in quarter 4 of 2020 and a convincing 58% of Ghanaian adults in 2017 have a proper account, together with cellular cash.

Despite the fact that World Financial institution predicted a pointy decline from 12.5% in 2020 to $42 billion in Sub-Saharan Africa, within the wake of the Covid-19 pandemic it solely dipped by 0.5% in 2019 and has since demonstrated resilience with a 2.3% enhance (World Financial institution Forecast, 2019).

One rising concern stays, sending cash to Sub-Saharan Africa is the most costly: sending $200 prices a mean of 8.2% (World Financial institution). At present, Ghana has a aggressive operator market of 29 corporations within the cash switch market sending to Sub-Sahara Africa, with 30 paying out operators (Remitscope Analysis, 2020).

The nationwide monetary inclusion technique goals to extend account possession from 58% to 85% by 2023. With the expansion of digitization and a robust Fintech sector in Ghana.

This additionally signifies that, there is a chance to develop remittance associated merchandise for the diaspora to encourage financial savings and investments for the expansion and growth of the native financial system and well-being of Ghanaians.

This requires remittance corporations that may develop a aggressive fee system to scale back the price of sending cash to Ghana, and ultimately assist to get rid of the price of remittance transactions fully. This presents one of many surest methods to develop the native financial system.