The Bank of Ghana (BoG) has in a statement firmly rejected assertions that the country lost US$8billion over the past two years due to Financial Technology companies (FinTechs) and Money Transfer Operators (MTOs) withholding funds.
This was meant to address recent media discussions regarding the involvement of Financial Technology companies (FinTechs) and Money Transfer Operators (MTOs) in Ghana’s inward remittance services and claims that the country has lost significant foreign exchange due to these entities’ operations.
Ghana has consistently seen an increase in remittance inflows year-on-year, as evidenced by data from both the Bank of Ghana and World Bank.
BoG reassures the public that both banks and FinTechs engaged in inward remittance services are required to submit regular prudential returns as part of their regulatory obligations.
The central bank also refutes claims of operating two foreign exchange systems, emphasising that all entities involved in remittance services must comply with the Foreign Exchange Act, 2006 (Act 723) and other legal and regulatory requirements.
Thus, BoG emphasises that FinTechs’ involvement in remittance services is limited to inward transactions only. The authorisation of FinTechs to engage in remittances has not in any way complicated data collection and analysis, it further clarified.
The engagement of MTOs, either by a bank or a FinTech, requires authorisation from the Bank of Ghana.
Indeed, remittances play an increasingly important role in Ghana’s economy; therefore the central bank’s clarification of regulatory processes, as well as its rebuttal of misinformation, will engender trust in the financial system and encourage continued growth in remittance inflows.
Remittance inflows totalled about US$4.5billion in 2021, representing about 5.9 percent of the country’s GDP. This was an increase from US$4.5billion and US$ 4.05billion in 2020 and 2019 respectively.
In fact, remittances contribute almost the same as net inflows of foreign direct investment to Ghana’s GDP. Ghana currently ranks as the second-largest remittance recipient in sub-Saharan Africa.
The absence of a suitable framework for harnessing the potential of remittances for economic growth and development remains a significant obstacle.
