The recently-launched Development Bank Ghana (DBG) will prove the most critical vehicle for mobilising diaspora-generated funds and remittances, which will be maximised to transform the local economy, acting Director of the Financial Sector Division at the Ministry of Finance, Sampson Akligoh, has said.
He argues that unique features of the Bank, including the size of its balance sheet and corporate governance structure, place it in a unique position to surmount some of the challenges other institutions have encountered in interactions with Ghanaians in the diaspora.
President Nana Addo Dankwa Akufo-Addo, at the launch of the DBG, committed the bank to issue a diaspora instrument that will leverage funds for critical sectors of the economy.
Expanding on this directive in remarks as Chairman at the Disrupt 270 Conference organised by Zeepay in commemoration of the International Day of Family Remittances (IDFR 22), he said the Bank will follow the example of similar institutions and expressed optimism of its success.
“We must build an economy around this significant resource to have a much bigger impact on the economy… We all know of other countries which have done these including setting up diaspora banks; so for us in Ghana, our development bank can become a key lever in mobilising diaspora funds for economic transformation,” he stated.
“One of the key anchors of diaspora issuances will be the Development Bank, and it is necessary for institutions like Zeepay to spearhead this conversation,” he added.
Government, through the Ministry of Finance, has, particularly over the last half-decade touted the issuance of diaspora bonds. The move, however, has been hampered by a number of factors including regulatory requirements for engaging individual, retail investors in other jurisdictions.
He further stated that the DBG is not an outlier but an added layer of tools in a carefully crafted strategy aimed at maximising the use of remittances.
Other tools in the box include the opening of a diaspora affairs office, addition of remittances as part the national planning agenda, guidelines issued by the Bank of Ghana (BoG), and recognition of remittances as a driver of financial inclusion and robust financial education.
Describing the conference’s theme – ‘Leveraging Remittances for Digital Inclusion and Impact’ – as apt, Mr. Akligoh said conversations around remittances must centre on social-facing issues; especially as remittances continue to play an increasingly larger role as a social safety net.
Remittances had been projected to decline by as much as 30 percent globally, on account of the pandemic; with Africa being the worst hit. The continent however defied those predictions, in no small part due to a large number of Africans in the diaspora who continue to play an increasingly important role in the economies of developed nations – especially in the areas of healthcare and technology.
In 2021, the total value of processed remittances globally reached US$800billion, with Africa accounting for US$84billion.
During the period under consideration, the nation received some US$4.6billion in diaspora remittances, just under 7 percent of Gross Domestic Product (GDP) for the year. Zeepay was responsible for processing approximately US$900million, about 20 percent of the national value.