Remittances over the years, as the records indicate, have played a significant role in the socio-economic development of the country and are also emerging as one of the leading contributors to Ghana’s Gross Domestic Product (GDP). Information accessible at the Bank of Ghana reveals that from January to November 2006, private inward transfers from non-governmental organisations (NGOs), individuals and other institutions through the Bank of Ghana and other financial institutions stood at US$4.25 billion, representing the largest source of foreign exchange into the country. Again, for the first quarter of 2007, according to figures released by the Bank of Ghana, remittances to the country totalled US$1.52 billion, representing an increase of about 17.1 per cent over the same period last year. What this means is that the remittances market is of strategic economic importance, with enormous growth potential for the economy of the country, with the estimated 4.6 million Ghanaian residents abroad having relatives and friends at home, as well as tourists holidaying in Ghana, small and medium-scale enterprises (SMEs) who need a convenient way of receiving money from abroad and trade associations whose activities attract remittances from abroad. For remittances to increase in order for funds to be channelled to assist in financing consumption and investment in human capital, such as education, agricultural and housing projects, among others, the remittances must be sent through approved channels. Financial intermediaries, such as banks, provide these channels. Before Tuesday, September 18, 2007, the SG-SSB Bank and Ghana Commercial Bank (GCB) were the only MoneyGram agents in Ghana. The Western Union Money Transfer has also been serving the purpose of providing the channel through which payments are made in an efficient and economic manner around the world or closer to home. On September 18, the United Bank of Africa (UBA) (Ghana) Limited launched its UBA-MoneyGram in Accra to provide money transfer services for the Ghanaian public. Through MoneyGram International and the UBA, customers around the globe can send and receive money at attractive prices. MoneyGram in general and UBA MoneyGram are designed to help people and businesses globally by providing affordable, reliable and convenient payment services. As part of the package associated with the UBA MoneyGram, anyone who receives money through UBA MoneyGram will automatically receive free airtime units to call the sender to say “thank you”. The package lasted from September 24 to the end of December 2007. MoneyGram has 66 years experience in money transfer services. It is present in over 100,000 locations world-wide. It also has a strong track record of compliance overseas, a vibrant network and a robust technological infrastructure. On the other hand, the UBA Group has a 47-year history. On November 11, 1997 in Lagos, Nigeria, UBA Plc partnered MoneyGram International to launch the UBA MoneyGram Services and received the covetous MoneyGram Excellence award one year after in recognition of the bank’s commitment and dedication to the development of MoneyGram. According to Mr Nnandi Okonkwo, the Managing Director and Chief Executive of UBA, this is a feat the UBA would replicate in Ghana by providing first class service to customers. UBA Money transfer is, therefore, aimed at creating marketing initiatives for the tremendous growth of MoneyGram transactions in Ghana, guaranteeing a stress-free transaction devoid of long queues at all UBA branches and ensuring exceptional customer satisfaction with well-trained MoneyGram tellers at all branches. The UBA is one of the five banks that have entered the Ghanaian market since 2002. Currently, following its policy of opening new branches and increasing the number of ATM locations in all the regions of its operation, UBA (Ghana) Ltd is making preparations to open five more branches within the next six months and an additional 15 by the end of the next financial year ending 2008. It is worthy of note that the emergence of and increase in the number of banks and the variety of products they offer is key to the facilitation of business across the West African sub-region as well as important for the various ECOWAS countries in working towards a single currency status. It is also true that Ghana’s vision of promoting the private sector as an engine of growth cannot be fulfilled without the effective functioning of financial intermediaries such as banks and other financial institutions. However, the lending rates of banks are not in line with the downward trend of inflation and the Bank of Ghana prime rate. In other words, the level of interest rates charged by the banks is very high, resulting in the high cost of doing business in Ghana, which defeats the goal of private sector development and economic growth. The banks, including UBA (Ghana) Ltd, must, therefore, reconsider their policies on interest rates, as they develop new and innovative products. — The writer is an officer of the Information Services Department and student at the Ghana School of Law, Accra.

Source: Graphic