Danquah Institute alerts government on illegal international money transfers

A research conducted by the Danquah Institute (DI) in three European countries indicates that more than 60 per cent of the total remittances sent to Ghana in 2010 were through illegal money transfer routes.

The study stated that these remittances from the illegal channels could be between $1.2 billion and $2.12 billion, including laundered money from crime proceeds.

Nana Attobrah, Head of Research at the Danquah Institute, was speaking at a press conference to highlight the dangers of illegal money transfer to Ghana from the Diaspora and its effects on the Ghanaian economy.

The research, which took three months to conduct, sought to assess the extent of illegal money transfer operations with regard to Ghana’s three largest European remittance corridors namely, Germany, United Kingdom (UK) and the Netherlands.

The study also looked at the Ghanaian regulatory environment as well as that of the three other sending nations, the products and services available on the market and the remittance patterns.

Besides, the DI said did an in-depth survey of 300 Ghanaians living in the UK and 103 Ghanaians living in Germany and a similar number in the Netherlands targeting all classes of community members, irrespective of gender, age, educational background, religion, cultural and political affiliation so as to give a cross-section of the Ghanaian community a fair and balanced representation and also achieve accuracy in the final report.

Nana Attobrah said the illegal money transfer business was a dangerous and growing industry which the Ghanaian authorities must throw their focus on.

He said the lack of proper attention had led to the institutionalization of this illegal money transfer business and per the findings of the research, the problem was almost beyond redemption in countries like Germany and the Netherlands.

Nana Attobrah explained that like the drug trade, it involved demand and supply, the supply side was in Europe and the demand side is in Ghana.

He said the solution to the problem was not to discourage genuine people abroad from transferring money to Ghana but to encourage them to use licensed channels for transferring funds which by themselves guaranteed them and their funds’ protection and efficiency.

Nana Attobrah also said the growing phenomenon of the underground money transfer business represented a huge loss of revenue to the state in unpaid taxes from commissions collected by the illegal Money Transfer organizations (MTOs).

He said the state could use these large incomes of foreign exchange to buy crude oil, address balance of payment issues, enhance the country’s creditworthiness and even use it as collateral for external loans.

Nana Attobrah said the research showed that despite the increasing numbers of licensed MTOs over the last two decades, the volume of cash transferred through illegal channels had been growing in the past few years, adding that beauty shops, food stores, spare parts shops, kiosks, churches, social groups and homes had become regular channels for remitting cash to Ghana.

He said: “We estimate that as much as half of the amounts transferred through the Netherlands and Germany are done through the illegal means. We found that the current stricter regulatory regime post 9/11 has paradoxically had the undesired effect of pushing more and more people into black market of illegal MTOs.”

Nana Attobrah also said the growing influence of the West Africa corridor in the illicit drugs trade to Europe was having a huge impact on the operations of the unlicensed money transfer channels.

He said honest importers and exporters were forced by convenience to patronize the illegal MTOs through which they could transfer as much as 200,000 Euros at a time to facilitate their legitimate business.

Nana Attobrah said these illegal money transfer operators had become a useful conduit for money launderers, attracting unhelpful negative attention to small and honest Ghanaian businesses in Europe.

Source: GNA

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