By Cecil MENSAH
A grant has been introduced unto the Ghanaian economy to reduce the cost of remittances in the country.
The Remittance Grant Facility (RGF), is a challenge fund established by the Ministry of Finance and funded by the Switzerland State Secretariat for Economic Affairs (SECO). It is aimed at facilitating the flow of remittances through formal channels to the poor and rural Ghanaians, and enhancing the impact of remittances on economic growth and poverty reduction.
It is also to provide financial assistance to companies to develop or introduce innovative remittances product and services at relative low cost to Ghanaians.
The project managed by KPMG, an international development advisory service, will further support the development of affordable and accessible products and services that will extend the reach of remittances to rural areas in the country to reduce cost.
Speaking at the launch of the project in Accra, Mr Charles Adu Boahen, a Deputy Minister for Finance, said the launch of the fund will constitute a substantial proportion of Ghana’s Gross Domestic Product (GDP) and further have a significant impact on the economy as a major contributor to GDP and source of foreign earnings.
Over the past decades Ghana’s foreign remittances have grown from US$ 1.4 billion in 2003 to US$ 17.8 billion in 2015 according to the Bank of Ghana (BoG) reports, he said.
He explained that the World Bank has also indicated that private sector remittances amounted to US$2 billion in 2015.
He said the World Bank further said in a report – ‘Leveraging Migration for Africa’ – which was done in collaboration with the Africa Development Bank that remittances are often used for ‘essential consumption, investment in physical and human capital and expenditures that improve human welfare and productivity.
“The report also indicated that remittances served as insurances against adverse shocks in the economy.”
In view of this, the deputy minister noted that the project will address the operational constraints associated with remittance flow channels into Ghana and to encourage innovative product and service development.
Mr. Roland Fischer, Charge de Affairs of the Swiss Embassy in Ghana, said economic development cooperation between Ghana and Switzerland dates back over two hundred years ago when the first Swiss explorers appeared in the Gold Coast.
According to him, Ghana is the biggest receiver of Swiss investments in the sub-Saharan African region and has always collaborated in the private sector of the economy.
He says SECO considers the establishment of the remittance channels as opportunity to provide service for eligible organizations such as banks, non-financial institutions, money transfer operator mobile network operators among others in the country.