Government targets 5% charge on remittances by 2020

Business News of Saturday, 6 May 2017

Source: 3news.com

2017-05-06

Ken Ofori Atta 1Ken Ofori Atta, Finance Minister

The Ministry of Finance says it is reducing remittances charges to 5 per cent.

According to the World Bank’s Send Money Africa report, Ghana remained one of the most expensive countries to send remittances to, with over 12 per cent charges on a $200 remittance.

Remittances from Ghanaians working overseas to their families back home dropped last year for the second consecutive time, to US$1.92 billion amid moderation in global economic growth that reflects the slowdown in China’s growth prospects and falling oil prices.

According to figures provided by the Bank of Ghana, the record of individual remittances through banks into the country in 2015 was 16.9 per cent below that recorded the previous year.

The declining level of personal remittances to Ghana is likely to be a source of worry for the country’s monetary and fiscal managers, who consider private remittances to be more vital to the economy than aid.

Remittances to the country hit its peak in 2013 when US$2 billion was sent home by what the World Bank has estimated to be 737,000 Ghanaians working abroad. Since then, however, the value of remittances has been reducing as economic growth worldwide slows.

This situation has been described as worrying since; people will use unconventional means to remit money, causing the nation to lose a lot of revenue. In this vein government together with the Swiss government has launched the Remittances Grant Facility (RGF) to help cut down on this 12 per cent charge.

The $2.6 million grant facility will be released in tranches to start-ups and companies that will develop innovative technologies and applications that are geared towards reducing the high charges.

Speaking exclusively to 3FM BUSINESS, Manager at KPMG, the fund managers, Amos Ansah, said they are working towards reducing the charges to between 3 and 5 percent “The aim of this project seeks to reduce the charges on remittances from 12 to 5 percent.

In the other areas, people pay as low as 3 and 5 percent, so we should be able to also hit that direction,” he said.

He added that the necessary security measures have already been developed to ensure that enlisted facilities do not abuse the funds.

The RGF project which starts this year, will end in September 2020.

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