Ghana’s forex remittances surge as nation suffers

The Economist Intelligence Unit (EIU’s) 2006 report on Ghana, says although remittance inflows are a valuable sources of foreignexchange for the country, helping to partially offset the large trade deficit, there is concern that the remittances reveal that a growing number of skilled Ghanaians are leaving the country to work in Europe. It is estimated that the economy received more than US$3 billion in remittances last year from US$2.2 billion in 2004. “The high growth in remittances is a comparatively recent trend in Ghana’s history, and the reason for the reason for the increasing emigration at a time when there has been upturn in macroeconomic performance is not really understood, says EIU report. Talk about remittances and brain drain bring the health sector into focus. A study in six African countries including Ghana has shown that about 62 per cent of health workers intend to migrate abroad. Ghana lost about 604 out of 871, representing 69 percent of medical doctors trained locally between 1993 and 2002. About 1 996 out of 7 867, representing 25 percent of professional nurses and 410, representing 14 percent of pharmacists were also lost within the same period. Dr Kofi Ahmed, Chief Medical Officer of the Ministry of Health, made these revelation at a conference on “Ghana Health Worker Migration and the need to strengthen the local health system,” in Accra on Wednesday. He said in spite of upward annual enrolment and output from training institution there was a shortage of health specialists, adding that at the end of 2002, the ratio of medical officers to the population was 0.09:1000, nurses, 0.4:1000 while that for pharmacists was 0.07:1000. As this newspaper went to bird on Friday health workers had laid down their tool in demand for higher wages. The EIU is glad that the ease of transferring money back to Ghana has improved greatly in recent years, due to the proliferation of moneytransfer outlets in Europe and the United States (particularly those aimed at Ghanaians). The competition between the money transfer companies, has also driven down the cost of making international transfers, says the EIU. EIU explains that to some extent, the decision of Ghanaian expatriates to send money home may reflect a preference for investing in property and the stock market in Ghana, rather than investing in relatively lackluster markets of the developed countries in which they reside. A report by the Institute of Development Studies (IDS) tilted “Sending Money Home” and released in January this year says remittances by international migrants to their countries of origin constitute the largest source of external finance for developing economies after foreign direct investment (FDI). Estimated official remittances are US$167 billion for developing countries in 2005, double the total development aid. In fifteen developing countries studied by the International Monetary Fund (IMF), remittances account for more than 10 percent of Gross Domestic Product. This is true for some islands in the Caribbean and Pacific and for several labour’exporting countries such as Albania, El Salvador, Jordan, Lesotho, Moldova, and the Philippines. Despite their increasing importance in total international capital flows, the relationship between remittances and economic growth has not been adequately studied.

May 2006
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