What is the importance of Ghanaian Expats in the Economic Development of Ghana?

Do you ever think about how to send money to Ghana through money transfer companies as an expat? In this article, we will talk about the contributions Ghanaian expatriates are making to the economic development of Ghana.

Quick facts:- Ghana is a Sub-Saharan African country. It has a population of 30.4 million; GDP (PPP) is 204.8 billion USD; 6.1% annual growth; 5.2% five year compound annual growth; 5,637 USD per capita; 4.3% rate of unemployment; 7.2% inflation (CPI); and FDI inflow of 2.3 billion USD. Despite these promising statistics, people from Ghana travel to foreign lands in search of better opportunities. There they find work, and as soon as they begin to earn, they look for money transfer companies for money transfer to Ghana to their families through credible companies such as ACE.

Now let’s take a look at how remittances sent by Ghana expatriates help the economy.

No corruption:- Remittances leave little margin for corruption and commissions while being transferred. The reason is that this amount is transferred directly by the sender to the recipient and thus does not have to pass through different and multiple passages which create room for corruption. Remittance is, therefore, considered to be clean money.

Poverty alleviation:- There are a number of studies spanning over decades that revealed that 1% increase in remittances as a percentage of GDP of a country could result in a 22% drop in poverty levels. These studies had focused on developing countries in Asia and Africa.

Foreign currency savings:- Remittances enable people to save money in foreign currencies. People sending and receiving remittances have two options as far as savings are concerned. People can either wait for exchange rates to rise before they convert the currency, or they can do so as soon as they receive remittances at the available currency exchange rates. The best option is to send money to Ghana online through ACE money transfer to get the best exchange rate with zero transaction fee.

Gross National Income:- Remittances are a big and reliable source through which the recipient country’s GNI is strengthened.

Financial market liquidity:- Inflow of remittances in recipient country increases liquidity in financial markets. This liquidity pushes interest rates down and results in expanded credit and investment.

Consumed income:- Remittances are one of a few incomes which get consumed in the recipient country as soon as it reaches the beneficiary by adding to the Aggregate Demand (AD).

Funds for startups:- Foreign remittances are used as a source to initiate startup businesses. A UK DFID report noted that capital for 80% of startup businesses in Somalia alone is funded by remittances.

Supplementing incomes:- In developing countries such as Ghana, remittances guarantee food, clothes and shelter and guard people against food insecurity which is rampant in remittances’ absence.

Income gaps bridged:- There is a huge gap between the incomes in rural and urban areas. These gaps are bridged when the country receives online money transfers to Ghana and other developing countries. Thus, remittances serve as a bridge between the incomes of rural and urban areas.

Land acquisition:- It is a common sight that people cannot afford to purchase land with their regular incomes unless they earn foreign remittances. Remittances help people acquire lands.

Educational viability:- People in third world countries always struggle to give quality education to their children because they cannot afford it. But, remittances enable people to afford quality education in reputable institutions which secure their bright future.

Conclusion:- The impact of remittances in Ghana or any other country receiving remittances is always positive and boosts the economy. All the areas we have discussed above have shown us that an economy grows if all the areas discussed above grow through the inflow of remittances.