Remittances can play major role in reducing poverty - UK Envoy
Mr. Kwabena Baah-Duodu, Ghana's Acting High Commissioner to the United Kingdom has said in London that remittances could play a major role in reducing poverty if they were well invested.
Towards this end, he emphasised that the development potentials of remittances should be secured by encouraging the act of remitting and reducing the cost of money transfers.
Speaking at the official launch of Remittance Study, for the Ghanaian community in the UK, Mr. Baah-Duodu said there was still a major gap in the money transfer process despite the fact that many policy recommendations had been made to drastically reduce the cost of remittance transactions and the use of formal financial systems or channels and to allow micro finance, credit unions and other intermediaries to engage in remittance services in order to increase access to both remitters and recipients.
The Remittance Study, being co-ordinated by Bruks Associates, a Management, Finance and Marketing Advisors based in Accra and funded by the USAID, is aimed at examining the development impact of private remittance flows into Ghana. The study is motivated by the prospect of increasing the developmental impact of remittances as an additional source of development funding for Ghana.
Another company, Citizens International based in the United States will conduct a similar study for the Ghanaian community in Washington DC, Atlanta, Chicago and Toronto in Canada.
Those present at the launch included Mr. Alex Kwasi Bruks, Managing Partner of Bruks Associates, Mr. Ray Sowah, Retail Manager of the Ghana International Bank, representatives of money remittance companies, representatives of Ghanaian associations in the UK and Ghanaians working in financial institutions and banks as well as opinion leaders within the London Metropolis.
Mr. Kwabena Baah-Duodu said the upsurge of remittances since 2000 from $650m to $1.4b in 2003 with an anticipated rise to $2.2b by the end of this year, among other things, showed the confidence Ghanaians had in various economic policies being pursued by the Government of Ghana, which had led to macro economic stability and accumulation of foreign resources which could cover goods for three and half months.
In his presentation, Mr. Bruks urged the companies to consider introducing new products in addition to the regular money transfers for Ghanaians in the diaspora. He was of the view that the introduction of new products coupled with healthy competition were some of the ways of increasing remittance flows.
He expressed concern about the operations of the money transfer businesses in the informal sector which, he said, were undercutting the market and preventing governments from having access to these remittances.
Mr. Bruks appealed to Ghanaian community associations, identifiable groups and individuals who would be served questionnaires on the survey to ensure prompt return of the forms to ensure submission of a comprehensive report on ways of increasing the country's remittances.
The event provided the opportunity for participants to air their views on the transactions. Issues highlighted included the need to reduce transaction costs, increase in the number avenues where these facilities could be accessed, thorough review of regulations governing money transfers, government assistance to encourage small remittance companies to grow, incentive to Ghanaians in the diaspora to open foreign bank accounts at a lower threshold and payment of good interest on foreign account savings.