Ghana Lost Over $10 Bn in Remittances in 5 Years – Dr. Atuahene

In an interesting revelation, it is emerging that Ghana lost a staggering US$10.6 billion in remittance inflows in a five period due to externalization by financial technology companies (fintechs).

This was revealed by a policy brief on Ghana’s remittances authored by financial analyst and banking consultant, Dr. Richmond Atuahene.

The brief examines Ghana’s remittances data between 2019 and 2023 revealing significant loopholes which are causing the country to lose billions of foreign exchange which could have strengthened the ever-depreciating local currency.

How the Huge Loss was Detected

Dr. Atuahene reveals that a careful analysis of the data reveals a massive discrepancy in Ghana’s inward remittances. While the World Bank reported that Ghana received $22.23 billion in remittances between 2019 and 2023, the Bank of Ghana data only captured $9.78 billion.

The difference of $10.6 billion is believed to have been externalized by fintech companies licensed under the Payment Services and Systems of Act 2019 (Act 987). This means the fintech companies are not bringing foreign currency like the dollar, pounds, or euros, etc from the remittances into the banking system.

They instead keep the forex outside the country while paying recipients in local currency. This reduces the supply of forex in Ghana affecting the cedi’s strengths and the accumulation of reserves.

The Cause

The key factor for this situation, Dr. Atuahene says stems from the regulatory oversight and the operations of the fintechs that facilitate the flows. Ghana’s system lacks strict enforcement mechanisms to ensure all forex earnings pass through official banking channels. This has led to a situation where large sums of foreign exchange meant for the country are being diverted, depriving Ghana of much-needed forex liquidity.

Dr. Atuahene says unlike Bangladesh and Sri Lanka which have been able to ensure that nearly 90% of all remittances are channeled through the banking system, same cannot be said of Ghana.

In his view, the externalization of funds by fintech firms has contributed to the persistent depreciation of the Ghanaian cedi, affecting overall economic stability.

“The acute depreciation of the Ghanaian Cedi in the past two years could be attributed to partly due to massive illegal externalization of forex by licensed Fintech companies despite the existence of various Acts of Parliament including the Foreign Exchange Act 2006 Act 723, Payment Services and Systems Act 2019 Act 987 and Bank of Ghana’s on guidelines for inward remittance services by payment service providers and various Forex Exchange Directives issued by Bank of Ghana,” portions of the policy brief cited by The High Street Journal read.

The Role of Fintech Companies

The report singles out 11 fintech companies as key culprits in this foreign exchange leakage. Under the Payment Services and Systems Act, these companies were granted licenses to process remittances, but instead of routing funds through the banking system, they allegedly externalized billions of dollars.

“The failure on the part of the Bank of Ghana to track, trace, and capture caused a foreign exchange loss of US$ 10.6 billion which has been externalized the 11 licensed Fintech companies,” Dr. Atuahene indicated.

This, he says is in direct breach of the Foreign Exchange Act 2006 (Act 723) making the actions of these fintech companies.

The Impact

The ever-depreciation of the cedi is heavily linked to this development. According to the financial analyst, no merchandise export category has the potential to bring into the economy such billions of forex.

These fintechs have restricted the supply of foreign exchange in the market, thereby putting pressure on the domestic currency and ultimately adversely affecting prices in the economy. The net result of this is the depletion of foreign exchange reserves, accelerating the balance of payment deficits, and affecting government debt repayment defaults. Now situation has become dire as the country has been prohibited from the international capital market hence weakening the local currency further since no forex is coming in from the capital market.

What Next?

Dr. Atuahene’s report calls on the government to urgently review the operations of fintech firms involved in remittance processing. He recommends enforcing stricter forex regulations, compelling fintechs to disclose all foreign exchange transactions, and ensuring that remittances pass through the formal banking system.

The report also urges the Bank of Ghana to publicly disclose the local partner banks that benefited from the $8 billion equivalent in cedi transactions in 2022 and 2023. Without transparency and accountability, Ghana risks further forex losses, worsening the country’s economic situation.

This brief comes after the Bank of Ghana recently launched a comprehensive audit of remittance transactions from Oct-Dec 2024. The audit is anticipated to strengthen regulations, enforce compliance, and curb illicit financial flows, potentially boosting foreign exchange inflows and stabilizing the cedi.

Last Updated on May 12, 2025 by samboad