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Ebook The Macroeconomic Impact Of Remittances In Ghana

Submitted by puput on Mon, 03/22/2010 - 02:17

Recent papers in development economics and finance have began to assign an important role to remittances as key ingredients in the growth prospects of developing nations and having a potentially positive impact as a development tool for developing countries.

Remittances are generally defined as that portion of migrants’ earnings sent from the migration destination to the place of origin. Although they can also be sent in kind, the term “remittances” is usually limited to refer to monetary and other cash transfers transmitted by migrant workers to their families and communities back home. Remittances reflect the local labour working in the global economy and have been shown to explain partly the connection between growth and integration with the world economy. Remittances improve the integration of countries into the global economy.

Remittances have for several generations been an important means of support for family members remaining at home. As migration continue to increase, the corresponding growth of remittances has come to constitute a critical flow of foreign currency into many developing countries and Africa in particular. Policy makers in developing countries have started to streamline financial systems, removing controls and creating incentives, with the aim of attracting remittances especially through official channels.

Recent global estimates show that, migrants’ remittance flows have assumed a significant prominence. In the developing world, remittances now surpass Official Development Assistance (ODA) receipts (Ratha, 2003). Official development Assistance transfers to developing countries in 2001 stood at about US$52.3 billion (The World Bank, 2004). This figure compares with global remittance flow of about US$77.0 billion the same year, up from US$51.1 billion in 1995 (The World Bank, 2004).

This paper presents Balance of Payments (BOP) estimates of private unrequited transfers (remittance figures) for Ghana and addresses part of the information gaps on the size of remittance flows. It shows that the level of private unrequited transfers increased significantly from US$201.9 million in 1990 to US$1,017.2 million in 2003. Total transfers have increased from just over US$410 million to US$1,408.4 million over the same period reflecting mainly an increase in private unrequited transfers. Private unrequited transfers are estimated to be bigger and more stable than ODA and FDI flows into Ghana since 1990. Also positive, though relatively weak, correlation was found between remittances and ODA on one hand, and between remittances and FDI on the other hand, over the period 1990 to 2003. To assess the importance of remittances in the Ghanaian economy, the size of remittances relative to key macroeconomic variables were examined.

CONTENT

ABSTRACT

    1.0 INTRODUCTION

SECTION II

    2.0 WHY DO MIGRANTS REMIT?
    2.1 ALTRUISTIC MOTIVE
    2.2 SELF- INTEREST MOTIVE
    2.3 IMPLICIT FAMILY CONTRACT I: LOAN REPAYMENT
    2.4 IMPLICIT FAMILY CONTRACT II: CO-INSURANCE
    2.5 LINK BETWEEN THEORY AND STATISTICS

SECTION III

    3.0 MEASUREMENT AND CONCEPTS
    3.1 METHODOLOGICAL ISSUES IN ACCOUNTING FOR TRANSFERS IN GHANA’ B.O.P
    3.2 SIZE OF REMITTANCE FLOWS
    3.2.1 VOLATILITY AND CORRELATION ANALYSIS
    3.2.2 REGIONAL DISTRIBUTION OF RECEIPTS
    3.3. PAYMENT SYSTEMS, COSTS AND DISTRIBUTION MECHANISM
    3.3.1. PAYMENT SYSTEMS
    3.3.2. COSTS AND DISTRIBUTION MECHANISMS

SECTION IV

    4.0 MACROECONOMIC IMPACT OF REMITTANCES
    4.1. PRODUCTIVE USES OF REMITTANCES

SECTION V

    5.0 POLICY OPPORTUNITIES, QUESTIONS AND CONCLUSIONS

REFERENCES
APPENDIX 1

    UNREQUITED TRANSFERS

APPENDIX: 2

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