As part of measures to stabilise the cedi, the Bank of Ghana (BoG) has initiated plans to tighten controls and block all leakages in remittance inflows.
The central bank believes this move will help curb the hoarding of foreign currencies, particularly the dollar, and discourage speculative activities.
Addressing members of the Association of Ghana Industries (AGI), the Governor of the Bank of Ghana, Dr. Johnson Asiama, stressed the need for a renewed mindset regarding the cedi. He called on businesses to support the BoG in efforts to close loopholes in the remittances sector.
“Our objective is to ensure that every dollar that is remitted is made to count,” he stated.
Dr. Asiama disclosed that the BoG will soon roll out several measures to sanitise and monitor the remittances sector to ensure proper accounting of foreign currency inflows.
“I wouldn’t go into details about the platforms we intend to put in place, but our objective is to ensure that every dollar that is remitted is properly channelled into the economy,” he added.
On efforts to boost Ghana’s gold reserves, Dr. Asiama described the GoldBod initiative as a strategic step that will continue to shield the cedi from external shocks.
“I’m beginning to see those two things play out,” he said, referring to reforms in the remittances space and the establishment of GoldBod.
He reiterated that the BoG’s drive to stabilise the cedi is expected to positively impact the economy by reducing inflation and fostering growth. By addressing leakages in the gold and remittances sectors, the central bank aims to ease pressure on the cedi and promote stability in the foreign exchange market.
Dr. Asiama affirmed the BoG’s commitment to ensuring the cedi remains stable and competitive, supporting both businesses and individuals.
Concerns Over Remittances
In 2024, banking consultant Dr. Richmond Akwasi Atuahene raised concerns about fintech companies operating in Ghana’s remittance sector, calling for stricter oversight.
He pointed to discrepancies in reported figures and their potential impact on Ghana’s foreign exchange reserves.
Dr. Atuahene urged the BoG to commission international audit firms to conduct forensic audits on all fintech companies, retroactive to 2019. He also suggested that the Ministry of Finance and the BoG ensure fintech firms reimburse BoG Nostro accounts or authorised dealer banks with all foreign exchange components derived from international remittances.
“Foreign exchange from inward remittances can help reduce the current account deficit and stabilise the local currency against major trading currencies,” he noted.
To strengthen oversight, he proposed that BoG acquire digital tools to monitor all inward remittances. “The Bank of Ghana must acquire software that can be linked with the fintech companies’ digital apps to track, trace, and capture all inward remittances,” he said, proposing a middleware platform using APIs and Ethernet-APL technology.
These recommendations come amid growing concerns about discrepancies between World Bank remittance data and figures from authorised dealer banks in Ghana.
“The central bank has consistently failed to address the gap between World Bank data on inward remittances and that of the 23 authorised dealer banks for the period between 2019 and 2023,” Dr. Atuahene said.
Citing the BoG’s 2023 Annual Report, he questioned the fate of significant remittance inflows: “The Governor reported that fintech companies received GH¢22 billion (US$3 billion) in 2022 and GH¢57 billion (US$5 billion) in 2023. Where were these foreign exchanges held?”
While the BoG has denied claims of losing US$8 billion through inward remittances, it acknowledged a shortfall, indicating that newly licensed money transfer operators (MTOs) and fintech companies have withheld approximately US$8 billion over the past two years.
Dr. Atuahene also called for enhancements to the international remittance data framework, urging both the BoG and the International Monetary Fund (IMF) to improve their BPM6 and RCG frameworks to better reflect the evolving nature of the remittance sector.