Expatriates send money to Ghana for starting businesses in an emerging market. Government agencies and the corporate sector have long seen the Diaspora as both a source of micro-financial resources and a customer. While the Diaspora’s position in “doing growth” has increased in recognition, and the Diaspora is increasingly used as an essential development participant, governments, the private sector, and even the Diaspora themselves do not see them as massive social investors.
This is a missed opportunity for leveraging and scaling up diaspora investments for socioeconomic growth, particularly given the funding gap for achieving the Sustainable Development Goals (SDGs). Government agencies, commercial banks, money transfer service providers, and the immigrant population should all consider diaspora investments as part of the development financing mix, especially in the context of “blended finance” packages.
How Can Expatriate Remittance be Useful Apart From Investment?
To begin with, money transfer to Ghana help to stabilise household consumption. Second, the role of remittances as a form of insurance is highlighted: remittances mitigate the impact of various sources of consumption volatility in developing countries (natural disasters, agricultural shocks, discretionary fiscal policy). Third, the importance of remittances as a form of insurance is more important in less financially developed countries. Fourth, when remittances as a percentage of GDP surpass 8.5 per cent, the overall stabilising impact of remittances is reduced.
However, the efforts of diasporas go far beyond monetary investments; they also include raising mutual remittances to promote philanthropic programs, technology transfers, information exchange, strengthened access to foreign capital markets, and expanded trade relations, to name a few. The 5Cs of Diaspora send money to Ghana online are a framework for highlighting the various types of diaspora involvement, including financial, intellectual, political, cultural, and social capital that immigrant populations can bring to their countries of origin.
How Remittance Reduces The Poverty Rate Of A Struggling Economy?
Remittances have a direct impact on poverty because they increase the recipient’s wages. They also have an indirect effect on poverty in the receiving countries by affecting productivity, unemployment, exchange rates, and capital access. Measuring the effect of remittances is difficult. However, an increasing body of evidence from poverty modelling models, cross-country regressions, and study of household survey data demonstrate that remittances do reduce poverty, even if the evidence on their effect on inequality is mixed. Due to the digital payment system, online money transfer to Ghana is more convenient and quick.