Govt urged to prioritise remittances over FDIs

The government has been urged to take deliberate steps to attract more remittances that can support the country's development agenda rather than focusing solely on foreign direct investments (FDIs).

This is because the country’s regulatory space poses significant barriers to a new entrance, as compared to neighbouring Nigeria which offers a more conducive and welcoming environment.

Notwithstanding the significant contribution of remittances totalling $4.6 billion in 2023, according to the World Bank, the country has traditionally prioritised FDIs, which yielded substantially less at $649 million, during the same period.

To support the remittance space, the Director of Taptap Send Africa, Mawutor Abraham, who was speaking at a media engagement in Accra last Monday, said there was a need for the government to create a welcoming environment to attract more remittance firms into the country.

He said a supportive domestic regulatory environment with clear guidelines for startups must be established, including a review of the four-year requirement for remittance firms wanting to establish in Ghana, while forging closer engagement between players and regulators.

“What remittances do for Ghana is far higher than FDIs. And as a country, we should take remittances seriously and encourage them because I think they will continue to outshine FDIs.

“For FDIs, we need to convince countries to come and invest but with remittances, all we are doing is to convince our own people who are abroad to send in more money,” Mr Abraham said.

Event

Taptap Send is a private financial technology (Fintech) app that allows people to send money back home to Africa, Asia and the Caribbean quickly and at low prices.

The media engagement was to provide updates on the return of Taptap Send in the Ghanaian market after a month’s suspension due to regulatory breaches.

The resumption of service means that customers in the UK, Europe, Canada, the US and the United Arab Emirates (UAE) can once again send money seamlessly to their loved ones in Ghana.

The temporary suspension was due to a directive from the BoG, which required Taptap Send to pause partnerships with local banks and fintechs for one month, after the launch of a new wallet product for its EU/ UK customers.

BoG must engage

The director further said that the Bank of Ghana (BoG) and other regulators must engage remittance firms and other stakeholders on ways to encourage more remittances into the country.

“The same way we hold forums to attract FDIs and investments, we should have similar forums to encourage remittances.

We need to make sure that remittance companies are happy such that if a company is able to pool $1 billion into the economy, we provide them with a red carpet,” he said.

Mr Abraham stated that while no laws were breached, Taptap Send respected the regulatory process and now confirmed that its operations and regulatory status remained intact.

“We are fully committed to complying with all relevant regulations and we’re excited to resume transfers to Ghana for the thousands of customers who have relied on us for their money transfers over the years,” he said.

Mr Abraham said that Taptap Send suffered a significant loss, exceeding $100 million in transactional value in November, following the suspension of its operations in Ghana.

“The company processes about $100m in money transfers monthly. We also lost some customers who we are now trying to get back,” he added.