"Harnessing Remittances Potential Key to Reducing Ghana’s Reliance on IMF Loans

" Harnessing Remittances Potential Key to Reducing Ghana's Reliance on IMF Loans - Expert Says\u00a0 \r\n\r\nThe incoming government must prioritize the foreign remittance sector to reduce dependency on external financing, including loans from the International Monetary Fund (IMF), says banking consultant Dr. Richmond Atuahene.\r\n\r\nSpeaking on GHOne TV, Dr. Atuahene argued that remittance inflows, if effectively tracked and managed, could exceed the value of Ghana\u2019s recent $3 billion IMF programme.\r\n\r\nHe proposed the establishment of a dedicated unit at the Bank of Ghana to monitor remittances, a move he likened to Bangladesh\u2019s success in formalizing its remittance channels.\r\n\r\n\u201cEven remittances alone will be bigger than the IMF loan. If we are able to track it, we will not go and beg for $3 billion,\u201d Dr. Atuahene said.\r\n\r\n Addressing Structural Gaps \r\n\r\nDr. Atuahene highlighted significant discrepancies in Ghana\u2019s remittance data. While the World Bank estimated Ghana\u2019s remittance inflows at $4.7 billion in 2023, only $2.8 billion was accounted for through formal banking channels, leaving $1.9 billion untracked.\r\n\r\nHe suggested that tighter oversight could help Ghana better leverage remittances to stabilize the cedi and reduce inflationary pressures.\r\n\r\n\u201cOnce we are able to track the remittances very well, it will help the management of the economy and also help the cedi to stabilize to bring inflation down,\u201d he added.\r\n\r\n Managing Legacy Debts \r\n\r\nIn addition to remittance reforms, Dr. Atuahene urged the new government to adopt a more strategic approach to managing the country\u2019s mounting domestic debts, including arrears owed to contractors and the energy sector.\r\n\r\nHe called for a repayment plan akin to the strategies employed in 2010, which he credited with stabilizing public finances at the time.\r\n\r\n\u201cHis Excellency must get a team as they had in 2010. You have a credible arrears repayment plan so that maybe by three or four years you have cleared [debts] and not created a new one,\u201d he explained.\r\n\r\n Technocratic Expertise \r\n\r\nThe consultant also emphasized the need for the President to assemble a team of experienced technocrats capable of addressing Ghana\u2019s complex economic challenges.\r\n\r\n\u201cHe must appoint people who understand the microeconomic issues to help. That will be the biggest plus for him,\u201d Dr. Atuahene stated.\r\n\r\n A Shift in Fiscal Strategy \r\n\r\nThe call to maximize remittance inflows and adopt stricter fiscal measures comes at a critical juncture for Ghana, which is grappling with high debt levels and external vulnerabilities.\r\n\r\nDr. Atuahene\u2019s recommendations underscore the need for sustainable domestic revenue strategies to mitigate future reliance on international financial assistance.\r\n\r\nAs Ghana transitions into a new administration, the success of these proposals could mark a turning point in the country\u2019s efforts to achieve long-term economic stability."

"Harnessing Remittances Potential Key to Reducing Ghana’s Reliance on IMF Loans

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