Ghanaian Diaspora sent in almost $5billion in remittances last year despite Covid
What was not affected was the resilience with which the Ghanaian Diaspora sent home money to support their loved ones in times of extreme need.
In 2020 Diaspora remittances to Ghana shot up by 5% to $3.6bilion according to data from the World Bank Migration and Development Report. That increase was higher than the Sub Saharan average of 2.3% despite a global decline.
The World Bank attributes the growth to increased use of formal means due to travel restrictions that gripped the world for the most part of the year.
But if restrictions on travel impacted informal remittances, so would bank closures because even when money was transferred into one’s account, one was unable to visit the banks to claim it.
This opened up brisk business with the informal operators who received monies in the diaspora and paid the cedi equivalent in Ghana without involving the banks or any established money transfer services.
“There was a lot of different barter arrangements going on during Covid because we had to be creative due to the lockdowns,” said Fred, an operator in the informal transfer sector. “In all, I saw about a 50% increase in the volume of business versus pre-covid era,” he added.
Considering that the informal operators’ work is similar to the black market, the operators are not forthcoming with actual numbers. But estimates are that the 18% of the Diaspora which exclusively uses informal means to avoid the hefty 8.2% cost of sending money remained within the informal means of sending money home while the 12.8% which uses a fair balance of formal and informal shifted slightly towards the informal means because of the ease with which their loved ones received their money, and hard times causing them to want to save on sending costs.
Thus after a lot of estimation aided by conversations with informal operators, a safe estimate of an additional $1.4billion made its way from the Diaspora to Ghana via informal means.
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