Worldwide remittance jumps by 60% to hit $653bn

Research by ACE Money Transfer indicates that remittances across the world have increased by 64.3% in the past decade rising from $420.1 billion to $653.4 billion in 2021.

According to the research, the remittance boom coincides with the recovery from the global financial crisis in 2011 – 2012.

The study adds that the rise highlights the increasingly important role that remittances from expat workers play in supporting developing economies.

This is particularly the case in periods of global economic stress, such as the current macroeconomic situation.

Remittances are vital in rural areas, where aid organisations have less presence. It’s estimated that income from remittances is more than three times higher than that from official aid and foreign direct investment combined.

Remittances also play a key role in urban areas, helping drive investment into real estate and infrastructure in developing countries.

Rashid Ashraf, CEO of ACE Money Transfer, said: “Remittances have a massive impact on people’s lives across the world. When times are tough, and economies are struggling, this is when remittances are particularly important.”

“Around three-quarters of remittances sent globally are used to cover essential things, like putting food on the family’s table and covering medical expenses, school fees or housing expenses. In addition, migrant workers tend to send more money home in times of crisis to cover loss of crops or family emergencies.”

Remittances to Ghana surge by 25% in 2021 – World Bank

Remittances to Ghana, the World Bank asserts increased by 25 percentage points in 2021.

The increase, the World Bank notes was due to the recovery of the global economy.

Remittances to Ghana in 2020, the Bretton Wood Institution earlier noted was $3.6bn, an increase of some 5 percentage points from the remittance inflows recorded for the year 2019.

Given the remittance amount realised in 2020 and the stated percentage increment, remittances to Ghana increased by some $900m in 2021, therefore putting total remittances to Ghana in 2021 at $4.5bn.

On the back of the World Bank’s assertion, Fitch Solutions in its assessment report on Ghana’s Current Account Deficit for 2022, stated that it expects remittances to Ghana to continue its upward trend this year.

“The World Bank estimates that foreign remittances to Ghana increased by 25.0% in 2021, as the global economy recovered, and we expect this trend to continue in 2022 as developed market growth continues, and as Ghanaians continue to move to developed markets as a result of the reopening of borders,” Fitch Solutions noted.

According to the research agency, Ghana’s Current Account deficit is expected to widen from an estimated 2.6% of GDP in 2021 to 2.9% of GDP in 2022, partially moderated by the anticipated increase in remittances for 2022.