Remittance inflows to Ghana to increase by 2020

0
31

GHANA’S remittance inflows will rise to just below $2.8bn by 2020. Remittances’ ratio to total exports, meanwhile, will decline to 15.2 percent as Ghana’s exports rise sharply over the same period, driven mostly by higher oil production and prices, says the Institute of Chartered Accountants of England and Wales (ICAEW).

ICAEW’s forecast is based on the assumption that emigrant population proportions in their respective destination countries remain constant at 2017 levels, emigration to these destinations grows at the same rate as the 20-35-year-old population in Ghana and considering host country GDP per capita growth forecasts.

Remittance flows play an important role in terms of Ghana’s external accounts. According to the World Bank, remittance inflows amounted to $2.5bn in 2014 – equal to roughly 18.6 percent of total exports that year. Remittance inflows subsequently declined to $2.2bn by 2017, equivalent to 15.8 percent of exports.

Regardless, remittance inflows will remain an important source of foreign exchange inflows moving forward. Remittances inflows are forecast to rise to roughly $5bn by 2030, which represents a compound annual growth rate (CAGR) of 6.5 percent  per annum over the 2018-30 period.

‘This robust growth is ascribed to the fact that Ghana’s young adult population is expected to expand rapidly over the forecast period, and this age cohort usually makes up for the bulk of emigrants,’ says ICAEW.  ‘Also, while Ghana’s growth prospects remain favourable, significantly higher income levels in countries such as the US (Ghanaians’ preferred destination in 2017), will continue to incentivise emigration,’ it adds.

LEAVE A REPLY

Please enter your comment!
Please enter your name here