Harnessing Remittances Potential Key to Reducing Ghana’s Reliance on IMF Loans – Expert Says
The 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.
Speaking on GHOne TV, Dr. Atuahene argued that remittance inflows, if effectively tracked and managed, could exceed the value of Ghana’s recent $3 billion IMF programme.
He proposed the establishment of a dedicated unit at the Bank of Ghana to monitor remittances, a move he likened to Bangladesh’s success in formalizing its remittance channels.
“Even 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,” Dr. Atuahene said.
Addressing Structural Gaps
Dr. Atuahene highlighted significant discrepancies in Ghana’s remittance data. While the World Bank estimated Ghana’s remittance inflows at $4.7 billion in 2023, only $2.8 billion was accounted for through formal banking channels, leaving $1.9 billion untracked.
He suggested that tighter oversight could help Ghana better leverage remittances to stabilize the cedi and reduce inflationary pressures.
“Once 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,” he added.
Managing Legacy Debts
In addition to remittance reforms, Dr. Atuahene urged the new government to adopt a more strategic approach to managing the country’s mounting domestic debts, including arrears owed to contractors and the energy sector.
He called for a repayment plan akin to the strategies employed in 2010, which he credited with stabilizing public finances at the time.
“His 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,” he explained.
Technocratic Expertise
The consultant also emphasized the need for the President to assemble a team of experienced technocrats capable of addressing Ghana’s complex economic challenges.
“He must appoint people who understand the microeconomic issues to help. That will be the biggest plus for him,” Dr. Atuahene stated.
A Shift in Fiscal Strategy
The 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.
Dr. Atuahene’s recommendations underscore the need for sustainable domestic revenue strategies to mitigate future reliance on international financial assistance.
As Ghana transitions into a new administration, the success of these proposals could mark a turning point in the country’s efforts to achieve long-term economic stability.
