A report funded by the UK Department for International Development (DFID) on remittances from UK to Ghana has revealed that despite the growth in payments, the system used to send the money is far from perfect.
Ghana and the UK have had long relations dating back to pre-colonial times and another peak of the close ties would be next week’s football friendly between Ghana and England in Wembley.
Also, exports from Ghana to the UK had grown by 38 per cent since 2004, and remittance flows to Ghana have tripled in the last 10 years.
However, although the remittance flow was competitively priced it was not making the most of available technologies, such as using mobile phones for money transfers.
“Many of the new remittance products are reliant on the recipient holding a bank account, which is not always the case in Ghana,” a statement by DFID in Accra said.
“Changes in regulation in Ghana would help, as current rules restrict the options for payout networks,” said the report, which proposed improvements to the UK to Ghana money transfer systems.
It concluded that remittances would continue to be important for Ghana, and that actions should be taken to maximise the benefits that they could bring.
The report, Constraints in the UK to Ghana Remittances Market – Survey Analysis and Policy Recommendations – was produced for DFID by Developing Markets Associates.
The survey was conducted on 160 Ghanaians living in the UK, to understand their remittance habits, aspirations and market experience(s).
Interviews were conducted with 10 leading Remittance Service Providers to understand the market-players’ perspectives and experience of operating in the UK and Ghana.
The DFID statement quoted Pat Torto, a remitter to Ghana since the 1970s, as saying “I generally use the same service regularly which is local and reliable, although when I travel home I take money with me to exchange in Ghana. Whilst I am happy with my service in the UK, I would think about switching if a cheaper, more convenient service came on the market.”
Mrs Effie Simpson-Ekuban, Chief Director of the Ministry of Finance and Economic Planning (MOFEP) in Accra, agrees with Pat.
She said: “We will urge financial institutions to be more innovative and develop products which are simple, easily accessible and affordable.”
She added: “MOFEP will look at policy issues in the report that will impact on remittances in order to maximise its impact on savings, investment, wealth creation and poverty reduction.”
Ms Sally Taylor, DFID’s new Country Director for Ghana, said: “We recognise that remittances are important to poverty reduction and help poor families to meet their basic needs. This report will be useful to policy makers and the remittance industry alike, so that the value of remittances to Ghanaian families can be maximised.”