Remittances More Vital to Ghana’s Economy Than FDI – Says Taptap Send Growth Director
Growth Director for Taptap Send Africa, Darryl Mawutor Abraham, has highlighted the pivotal role of remittances in Ghana’s economic development, asserting that remittances surpass foreign direct investment (FDI) in significance.
Speaking in a media engagement on Monday, December 16, Mr. Abraham emphasized that remittances consistently outperform FDI in terms of impact and contribution to the country’s economy.
“What remittance does for Ghana is far higher than FDI. Remittance is playing a far bigger role than FDI. As a country, we should encourage more of that because remittance would continue to outshine FDI and have a far greater impact,” he stated.
He explained that while FDI requires significant effort to attract external investors, remittances depend on the contributions of Ghanaians abroad. “All we are doing is convincing our own people living outside the country to spend more money,” he remarked.
Taptap Send, which processes over $10 billion annually into Africa and Asia, accounts for about a quarter of Ghana’s average $5 billion remittance inflow. This figure, exceeding $1.6 billion, is significantly higher than the country’s annual FDI average.
Mr. Abraham speaking further, urged the government to adopt proactive measures, such as creating forums dedicated to promoting remittances, similar to those used to attract FDI.
“We’re leaving remittances to grow on their own, but we should be engaging with remittance companies to make the environment better and drive more inflows,” he advised.
Over the last few years, Ghana’s Foreign Direct Investment (FDI) has been on the decline. According to data from the Ghana Investment Promotion Centre (GIPC) quarterly reports, FDI has been steadily on the decline.
In 2017, Ghana had its highest FDI numbers where the country received an estimated $6.19 billion from investors.
However, investments have been on the decline, dropping to its lowest point in 2023, receiving only $663 million.
This year, Ghana’s FDI might be on pace for its lowest ever. According to figures from Q1 2024 to Q3 2024, Ghana has only received investments totaling $325.88 million.
Enhancing the Regulatory Environment
Mr. Abraham underscored the need for a conducive regulatory framework to attract more remittance companies to Ghana. He argued that Ghana’s existing regulations make it difficult for remittance startups to operate, compared to other African countries such as Nigeria.
“For instance, there’s a law that requires remittance companies to have traded for over three years before operating in Ghana. This doesn’t support startups. Nigeria for instance, allows companies with a valid license from the UK to start immediately, but Ghana doesn’t,” he explained.
He added that creating a welcoming regulatory environment—one characterized by clear guidelines, efficient processes, and engagement with industry players—would encourage more companies to invest in the remittance sector.
As remittance inflows continue to dwarf FDI figures, Mr. Abraham reiterated the need for Ghana to prioritize this critical revenue stream by implementing reforms that make the country a hub for global remittance services.
