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Channels for Financial and Non-financial Remittances from the Ghanaian Diaspora toward Development

Canales para las remesas financieras y no financieras de la diáspora ghanesa hacia el desarrollo
Canaux de transferts de fonds financiers et non financiers de la diaspora ghanéenne pour le développement
Amanda Coffie


This chapter deepens the discourse on diaspora and development in countries of origin. It proposes a shift from focusing narrowly on inflows of foreign currencies to also considering other forms of remittances such as goods, skills and ideas, which help maintain emotional bonds between family and communities across generations. Ghana acknowledges the diaspora’s beneficial role in development and has established gateways to facilitate the flow of resources. However, these formal gateways are skewed toward financial remittances, seen as the essential source for the State’s developmental agenda. With its varied composition and resources, the Ghanaian diaspora uses multiple channels to contribute toward their families and local community projects through individual contributions and resource pooling. Thus, the Ghanaian diaspora’s engagement reflects a participatory approach that has received limited State recognition but is appreciated and encouraged by recipients within Ghanaian communities. The chapter recommends government provision of secure channels for financial transfers while recognising cultural remittances and social connections as crucial for sustaining families, especially for reducing poverty and ensuring food security, which are specific and immediate concerns for communities.

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1. Introduction

1Diaspora groups, a subpopulation of migrants, have in the last half-century attracted increasing policy and scholarly attention for many reasons. The relatively strong sentimental and material links they have with their countries of origin—their homelands—makes them greatly important in the arena of development (Sheffer, 1986; de Haas 2006, Nieswand, 2009). Both scholarly and policy records have noted an increasing trend in remittances being sent from the diaspora to their respective countries of origin. In Africa, the data indicate that accumulated migrant cash and investment remittances are higher than official development assistance (ODA) sent to recipient countries. The World Bank estimates that in the next “five years, remittances will likely become larger than development assistance and FDI [foreign direct investment] combined” (Dilip Ratha [Lead Economist and Manager, Migration and Remittances at the World Bank], cited in Barne and Pirlea, 2019).  Furthermore, migrants’ cash remittances are considered more stable than foreign direct investment. They are thus a critical and stable source of external finance for Africa (World Bank, 2019b).

  • 1 The World Bank lists 46 of Africa’s 54 countries as “sub-Saharan”, excluding Algeria, Djibouti, Egy (...)

2According to the World Bank (2019b), since 1990, migrants’ cash contributions to sub-Saharan Africa1 have steadily increased. In 2017, there was an increase of 9.2 per cent amounting to USD 42 billion and an increase of 9.6 per cent in 2018, totalling USD 46 billion. In 2018, Nigeria and Ghana were the highest recipients with inflows of USD 28.9 billion and USD 3.8 billion respectively. Other African countries receiving high amounts were, Kenya, (USD 2.7 billion) Senegal (USD 2.2 billion) and Zimbabwe (USD 1.9 billion) (World Bank, 2019b).

3Individually, African countries are harnessing diaspora resources for their socioeconomic development, with varying results. In this article, I focus on the case of Ghana and the Ghanaian diaspora. Ghana, the first sub-Saharan country to gain independence from colonial rule, in 1957, has always encouraged its diaspora’s participation in its development agenda. Ghana’s leadership role in the pan-African movement, initiated by the first president, Kwame Nkrumah, has always called on the diaspora not to disengage from the continent in general and Ghana more specifically.

4Ghana’s development history is chequered and shows how the country has adopted different approaches with various stakeholders. When it gained independence, Ghana turned to the developmental state model in its quest to transform its economy and lift millions of Ghanaians out of poverty. From this perspective, ‘the State constitutes a superior means for the fulfilment of economic and social aspirations; participation in its activities is deemed beneficial’ to every societal sector (Azarya and Chazan, 1987, 106). This claim is anchored in the assumption of attributes accorded to the State as an actor that does not sit on the fence concerning the development process, and instead actively participates in it (Laird, 2007; Dadzie, 2013). The model was successful, leading to growth in industry and infrastructural development. However, internal political instability began with the overthrow of Nkrumah in 1966. External economic factors such as the oil shocks of the 1970s triggered by the OPEC (Organisation of the Petroleum Exporting Countries) oil price hike set the process back and eroded most of the gains that had been made. These economic and political challenges became push factors for Ghanaians who migrated to Europe, North America and some other African countries.

5By the 1980s, Ghana’s economic crisis had worsened. The country therefore sought relief from external actors and institutions; unfortunately, these partnerships did not yield the needed results. Indeed, to a great extent, the already dire financial situation was exacerbated by the Structural Adjustment Packages (SAPs) imposed by the World Bank and the International Monetary Fund (IMF). Some negative impacts include higher unemployment levels, an increase in poverty levels, and an increase in the cost of social services (Konadu-Agyemang, 2001).

6The economic conditions of the 1990s contributed to new patterns of migration from Ghana that had emerged in the early 1980s. Ghana experienced high brain drain levels from the 1980s through the 1990s. Highly skilled professionals, diplomats and international civil servants left and were joined in the diaspora by large numbers of semi-skilled, young and irregular migrants. These economic and political challenges contributed to the changes in the profile of the Ghanaian diaspora.

7Since the 1990s, similar to other African countries, Ghana has been on a quest for a new development paradigm. The emerging nexus between diaspora and development presented itself as a viable alternative to stimulate growth and development. In the new wave of development, the diaspora’s relevance to African home countries has been well recognised and appreciated by their Ghanaian counterparts at home. In response, the government redirected significant structures and policies to harness the diaspora’s contribution effectively.

8Currently, Ghana’s development outlook on both economic and non-economic scores is good relative to other African countries. The African Development Bank estimated Ghana’s 2019 real GDP growth at 7.1 per cent and placed Ghana among Africa’s ten fastest-growing economies. Ghana’s 2019 Human Development Index (HDI) score was 0.611, above the average of 0.547 for countries in sub-Saharan Africa. The HDI rated Ghana as showing medium human development in relation to other countries. Ghana’s HDI ranking has seen an incremental increase since the 1990s (UNDP, 2020). However, the country needs to accelerate or maintain the incremental growth to ensure healthy societal growth and transformation in its citizens’ lives.

9Conceptually, this chapter observes that the state-led development agenda focused on economic growth indicators partly explains Ghana’s privileging of financial remittances over other forms of remittance. Also, the government’s focus on financial remittances is explained by the inability of policies and institutions to accommodate the varied composition of the diaspora community. Although the literature on migrant remittances has noted the complexities of diaspora composition, resources and transfers (Levitt, 1998; Brinkerhoff, 2011; Lacroix, Levitt and Vari-Lavoisier, 2016), policymaking remains inadequate to accommodate these variations. Instead, policymakers perceive the diaspora as homogeneous and offer narrow narratives of diaspora and development. This chapter contends that the State’s privileging of financial remittances members of the diaspora, with the means to make other forms of contribution. Additionally, government approaches have resulted in the provision of formal gateways incapable of accommodating the multiple forms of contribution from the Ghanaian diaspora to development at both the family and community levels.

10This chapter notes the variations in the composition of diaspora contributions using narratives of migrants’ migratory experiences, but first it begins with a brief narrative defining the Ghanaian diaspora. This introduction is followed by a discussion of Ghana’s gateways for harnessing diaspora resources and the challenges these formal systems present. Here, the chapter examines the various government gateways for facilitating and directing financial remittances to recipients that explicitly contribute revenue to the State and provide for the recipients’ expenditure. Finally, the article presents other gateways and multiple ways adopted by the Ghanaian diaspora to support their families’ and local communities’ well-being and maintain emotional and generational bonds.

2. Defining the Ghanaian Diaspora

11The term diaspora is used in several different contexts worldwide (Van Hear, 1998; Akyeampong, 2000; Zeleza, 2008). The core features of a group associated with the term diaspora include dispersal from a homeland to two or more other territories, an enduring presence abroad and the flow or exchange of social, economic, political or cultural resources between the spatially separated populations.

12Concerning Africa, the term ‘African diaspora’ is therefore generally used to describe the worldwide group of people who either migrated from or trace their origin to the African continent (Zeleza, 2005, 2008; Coffie, 2020). From a policy perspective, the African Union (AU), adopted the following as the continent’s formal definition of the African diaspora: ‘The African Diaspora consists of peoples of African origin living outside the continent, irrespective of their citizenship and nationality and who are willing to contribute to the development of the continent and the building of the African Union’ (AU, 2014, Art.1).

13Faal (2019) identifies seven categories within the African diaspora (See Table 5.1). These categories can be split into two major groups to reflect the significant patterns of migration outside the continent. The first four groups are associated with migration preceding Africa’s struggles for independence. The remaining three are linked with movements outside of the continent during the post-independence era. These categorisations are not meant as a ranking of one group over the other. Instead, they are primarily for practical policy reasons. Faal (2019) notes that identifying these categories enables policymakers and practitioners to devise and implement appropriate policies, strategies and programmes for effective and optimal diaspora engagement, investment and development.

Table 5.1 Typology of people within the African diaspora

Type of African Diaspora

Period of Migratory Wave

Main Location Around the World

Primordial Diaspora

Circa 100,000 BCE

All of humankind across the world

Prehistoric Diaspora

Circa 50,000 BCE

Australasia, Melanesia, Andaman Islands, etc.

Oriental Diaspora

8thto 18thCentury –1800

Arabia, Levant, Indian Subcontinent, Far East

Atlantic Diaspora

16thto 19thCentury

Brazil, North America, Caribbean, Latin America

Post-War Diaspora

1945 to 1990

Former European colonial countries, North America

Post–Cold War Diaspora

1990 to Present

Western Europe, North America

Cosmopolitan Diaspora

1970s to Present

African professional and expatriate families in major cities across the world

Source: Faal (2019, 5).

14At the state level, terms such as the Somali diaspora, Liberian diaspora, Rwandan diaspora, Zimbabwean diaspora or Ghanaian diaspora have been used to name and represent African diaspora populations associated with the respective states.

15 In this article, I contextualise the Ghanaian diaspora as Ghanaians and their descendants living outside Ghana. They have developed a transnational identity with dual or multiple obligations toward both their country of residence and Ghana as their country of origin. They are not likely to return to Ghana permanently or visit regularly. Still, they maintain ties with their families and wider communities, as well as the State. Also, I note that the Ghanaian diaspora, like other diasporic groups, is neither a homogeneous group nor a fixed category. Its composition, location and relation to Ghana are diverse and not static. The fixed characteristic of the Ghanaian diaspora is its members’ ties to Ghana either as members of a displaced population or as descendants of forced and voluntary migrants out of Ghana.

3. Method

16Methodologically, this study is qualitative and based mainly on archival research. Compiling the chapter’s data involved extensive review and analysis of academic literature, as well as financial, legal and institutional documents. Additionally, I conducted four key persons interviews via phone. The study adopts Faal’s (2019) typology of the African diaspora to distinguish the various categories of the Ghanaian diaspora. It focuses on the second major category, which comprises the post-War diaspora, post–Cold War diaspora and cosmopolitan diaspora. The temporal scope of my analysis of the various government gateways for harnessing diaspora remittances covers the period from 1992 to the present, generally referred to as the Fourth Republic of Ghana. The focus on this period and these categories of the Ghanaian diaspora does not discount the rich history of the African diaspora and its members’ engagement with Ghana as developmental partners before the 1990s or the Ghanaian diaspora’s activities before the 1970s. However, selecting the period of the Fourth Republic enables the chapter to look at subsequent government engagements with the diaspora and the diaspora’s responses within the same kind of governance structure. The period from independence to the Fourth Republic has not seen a structured and consistent engagement with the diaspora. Military takeovers from 1966 to1990 (interspersed with brief moments of constitutional rule; 1969–72 and 1979–81) interrupted relations between governments and the diaspora. Also, the periods of military and authoritarian regimes served as significant sources of development challenges. They led to the dispersal of Ghanaians, which changed the composition of the Ghanaian diaspora. The Fourth Republic also represents a shift in government and general migrant relations: that is, from relations characterised by ill feelings between the government and Ghanaians abroad to much more solid relations between Ghana and the diaspora. Both sides have developed cordial ties, each showing mutual respect and seeing each other as significant stakeholders in order to drive development (Teye, Alhassan and Setrana, 2017; Manuh, 2006).

4. Government Gateways for Engaging the Ghanaian Diaspora

17Until 2015, Ghana had no comprehensive migration policy, and the process of formalising diaspora engagement initiated in 2001 remains at the draft stage. Nevertheless, a modest diaspora engagement framework has been developed, streamlining the government’s relationship with the diaspora community. Since independence, successive governments have carried out numerous political, cultural and socioeconomic initiatives to engage the diaspora (Coffie, 2012; 2017). The history of Ghana’s engagement with the Ghanaian diaspora is organised in two thematic policy practical areas: symbolic celebrations and the formalisation of rights and responsibilities.

4.1. Symbolic Celebration of Ghanaian Diaspora

18Ghana has a rich history of engagement with its diaspora, predominantly involving ceremonial celebrations to incorporate the diaspora into Ghanaian society. These include conferences, facilitating dialogue through workshops and fora to enhance cordial ties between the government and the diaspora.

19Thus, as part of former president Kwame Nkrumah’s agenda on emancipation and uniting African countries against imperialism, Ghana launched the All-African Peoples’ Conference (AAPC) in 1958 (Manuh and Asante, 2005; Mazzucato, 2007). Although the AAPC was then made up of eight independent African states, the conference was organised to court the support of all social groups, including the diaspora. The aim was to join forces to demand that Africa be returned to the people from whom it was taken through colonialism. Nkrumah extended invitations to Africans living in the diaspora and freedom fighters exiled or fleeing from colonial rule and Apartheid to move to the newly independent Ghana. Thus, under Nkrumah, Ghana was presented as a safe haven for members of the African diaspora (Coffie, 2012). However, Ghana broke ties with the diaspora after Nkrumah was overthrown in 1966 (Mazzucato, 2007).

20The 1990s saw a renewed interest on the part of Ghana’s government in reinvigorating its engagement with the diaspora. It organised several conferences and celebrations, including Emancipation Day and the Pan-African Historical Theatre Festival (PANAFEST), under the auspices of the Ministry of Tourism, to promote tourism among the African diaspora (Alhassan, 2010). These became annual celebrations for Ghana to display itself as a home for the African diaspora. This included Ghanaians, but there is little evidence of their participation in these events. Indeed, the government mainly showcased the migratory experiences of the transatlantic slave trade, which excluded the majority of the Ghanaian diaspora with varied migration histories.

21At the beginning of the twenty-first century, Ghana relaunched itself as a home for the African diaspora. It began a process of formalising a relationship with the diaspora community. This started with a ‘Homecoming Summit’ in 2001. The summit focused on enhancing dialogue, exploring opportunities for new relationships, and identifying ways of tapping into Ghanaians’ acquired capacities and resources abroad. Another conference was organised in 2007, the ‘Joseph Project’, named for the biblical character of Joseph and his return home after his stay in Egypt. This project, like its predecessors, was organised to evoke a sense of belonging among the transnational community. These celebrations intended to shift Ghana’s attention away from the previous focus on the African diaspora in general toward the Ghanaian diaspora more specifically.

22Most recent celebrations have been inclusive of descendants of both the African and more specifically Ghanaian diasporas. Some of the activities include the 2012 Colloquium of Diaspora Engagement Project and the Diaspora Business Summit of 2013 and 2014. The most recent is the 2019 Year of Return. This event was promoted as an invitation to the African diaspora as a celebration marking ‘400 years since the first arrival of enslaved Africans in Jamestown, Virginia’ (Year of Return, Ghana, 2019).

4.2. Extending the Rights and Responsibilities of the Ghanaian Diaspora

23With the enactment of the dual citizenship provisions of the Citizenship Act, 2000 (Act 591)2 and the Citizenship Regulations, 2001 (LI 1690),3 the government allows Ghanaian citizens to acquire a second nationality without losing their Ghanaian citizenship. The law also provides for the ‘Right of Abode’, which grants diaspora visas to persons who cannot access dual citizenship. Through the work of the Diaspora Vote Committee,4 proxy voting or electoral expression was provided for in the Representation of the People (Amendment) Act (ROPAA, Act 699) of 2006.5

24Ghana has established centres and institutions to house and promote these and other interventions of the diaspora’s rights and responsibilities. These include the Non-Resident Ghanaians Secretariat (NRGS) created by the Ghana Investment Promotion Centre (GIPC) in 2003, which coordinates activities and serves as the centre for promoting homeland investment opportunities for members of the diaspora (Vezzoli and Lacroix, 2010). In 2007, the Ghana Opportunity Network was established to provide ‘easy access to credible information to Non-Resident Ghanaians and other potential investors’ (Vezzoli and Lacroix, 2010, 28). In 2006, the Ministry of Tourism was renamed the Ministry of Tourism and Diaspora Relations. In the same year, the Ministry of the Interior also instituted the Migration Unit to coordinate the various national institutions to manage migration and build migration into national development activities. In 2009, Diaspora Affairs was moved from the Ministry of Tourism. Subsequently, the government created a Diaspora Bureau at the Ministry of Foreign Affairs and Regional Integration. Currently, the government has incorporated Diaspora Affairs as part of the Office of the President.

25The government’s work of granting rights to members of the Ghanaian diaspora and establishing institutions to ensure these rights has been complemented with the formalisation of extracting responsibilities. The State’s demands for members of the diaspora to meet certain obligations have mainly focused on the diaspora’s contribution to economic development bills. Thus, within this space, the government has made several interventions to facilitate and harness the diaspora’s resources. Among these are the issuing of bonds targeted at the Ghanaian diaspora in 2007. The government instituted new regulations to reduce the financial system’s legal and procedural constraints to facilitate economic remittances. For example, in 2008, the Bank of Ghana (BoG) introduced an e-zwich payment system to enable cash withdrawals and card transactions, even in rural banks. To further draw the diaspora into development, the government offers a ‘two-year tax holiday’ for direct investments in the four deprived regions of the country (Central, Northern, Upper East and Western) (Awumbila and Teye, 2014).

5. The Diaspora’s Modes of Contributing to Development in Ghana

26Undoubtedly, the Ghanaian diaspora community is a major resource in the scope of Ghana’s development. Its growing prominence is attributed to the fact that the diaspora’s contributions and cash inflows outweigh the foreign direct investment pumped into Ghana’s economy under the cloak of poverty alleviating programmes. Furthermore, the statistics supporting this assertion are collated from formal and recognisable channels of inflows. What is entailed in undocumented channels remains unknown and could significantly change the reported figures (Higazi, 2005; Mazzucato, van den Boom and Nsowah-Nuamah, 2004). The following section explains the different methods employed by the diaspora to augment government efforts toward development.

5.1 Government-Facilitated Gateways for Harnessing the Diaspora’s Financial Remittances

27As noted above, Ghana receives a substantial amount in remittances from the diaspora each year. The World Bank (2021) records that the inflow of remittances saw an immense increase from USD 32,396,800 in 2000 to USD 135,852,160 in 2005, and further to USD 4.982 billion in 2015. As a result of the global financial crisis of 2015 to 2016, there was a drop in 2016 to 2.98 billion. Inflows began to increase in 2017, and in 2019 about one million migrant Ghanaian workers in foreign countries and others in the diaspora remitted USD 4.054 billion—equivalent to about 6.1 per cent of GDP.

28To enhance financial transfers, the government has rolled out several policies and financial services to both the diaspora and recipients at home. These include savings and investment schemes and money transfer schemes.

5.1.1 Direct Investments and Savings

29Direct investment schemes are a significant avenue created by the government to channel financial remittances from the diaspora toward socioeconomic development. These include regular savings accounts and diaspora-specific financial products like individually managed accounts and investment disbursement accounts. These allow members of the Ghanaian diaspora to operate foreign accounts in Ghanaian banks.

  • 6 The Old Ghanaian Cedi (GHC) was replaced with the New Ghanaian Cedi (GHS) on 1 July 2007. However, (...)
  • 7 In 2007, the Ghanaian government introduced a new currency, which was 0.0001 (1/10000) of the old c (...)

30Another formal savings and investment scheme is the diaspora bond. In 2007, the government issued a Golden Jubilee Savings Bond. The local currency bond was GHC 50 million (Ghanaian Cedis)6 (around USD 50 million at issue),7 with an interest rate of 15 per cent.

  • 8 Please see footnote above for the conversion to USD.

It was available to Ghanaian citizens only, although the marketing mainly targeted members of the non-resident Ghanaian diaspora. The nationality restriction excluded members of the Ghanaian diaspora without Ghanaian citizenship. Of the target of GHC 50 million, the bond subscription amounted to only GHC 20 million (40 per cent). Of the GHC 20 million raised, GHC 18.73 million (94 per cent) was raised from local sales, and GHC 1.10 million (6 per cent) was from the Ghanaian diaspora in the UK, Canada and the US.8

Faal, 2019, 12

5.1.2. Money Transfers

31Money transfer companies (MTCs) and financial institutions are the two central means of transferring and receiving cash in Ghana. Through their global networks, these institutions have provided avenues for diaspora communities to remit money to Ghana. They offer a variety of delivery service channels, such as direct-to-account, cash-to-mobile phone, cash-to-card and person-to-person (also known as cash-to-cash) transfers. Their platforms are integrated to allow money transfers from bank to bank, from MTC to bank, and through a mobile money system.

32The Ghanaian diaspora relies on money transfer companies’ services because of their reliability, speed of delivery, accessibility and convenience in the recipient’s location (Quartey, 2009; Teye, Badasu and Yeaboah, 2019). The MTCs work with financial institutions and many of the financial institutions in Ghana are agents to two or more MTCs. MTCs like Western Union and MoneyGram offer the best access to sending and receiving money because of their broader coverage, even though their charges are very high. Others such as Ria and Small World have lower fees but offer limited geographic range and unreliable networks (Teye, Badasu and Yeaboah, 2019).

33Beyond the inflow of foreign cash, the use of these systems accrues other socioeconomic benefits to Ghana. These include money from service charge fees that is received by the MTCs and financial institutions. In Ghana, the recipient does not pay cash for these fees because the remitter pays the charges whenever they send money. However, the system also enables financial institutions to receive a proportion of remitters’ fees as a commission. These create both income revenues for the institutions and tax revenues for the State.

34Additionally, expanding these institutions to accommodate the increasing number of remitters and total amounts sent is linked with job creation in both the private and public sectors. All major telecommunication companies in Ghana have expanded their services to include receipt and disbursement of financial remittances. Again, commercial service providers have increased their presence in communities by opening and maintaining branches to make them more accessible to remittance recipients. Finally, numerous job opportunities have been created by improving and expanding technology to offer easy transfer and receipt of money from abroad. All of these factors contribute to Ghana’s economic growth and an increase in government revenues for development.

5.1.3. Challenges of the Formal System of Financial Remittances

35Notwithstanding the accumulated benefits of financial remittances toward Ghana’s development, challenges exist associated with the transfer process and mobilisation of such funds toward the State-led development agenda. For instance, many international remittances to Ghana are transferred through informal channels, such as friends, relatives, self-carry when visiting home, and hiding money in posted letters (Ahinful, Boateng, and Oppong-Boakye, 2013). These informal processes have proven to be unreliable and challenge the State’s quest to monitor cash inflow for planning purposes. As described by the International Fund for Agricultural Development, the transfer of remittances through informal channels tends to drain receiving countries of some of the benefits that can accrue from remittances (for example, savings and investments) (IFAD, 2006).

36General challenges of money transfer to Ghana include the high cost of transfers, unfavourable exchange rates, and strict financial limitations on the amounts that can be transferred via mobile money systems. According to the World Bank (2020), the average sending cost of cash remittances to sub-Saharan Africa remains the highest at 9 per cent of the amount sent, almost double the cost of sending money to South Asia, against a global average of 6.8 per cent. For example, Ghanaian remitters in the US pay close to 20 per cent on any amount between USD 50 and 500, 3 per cent for amounts between USD 550 and 1,000 and 2 per cent for amounts of USD 2,000 and above (Teye, Badasu and Yeaboah, 2019). Indeed, the less money you send, the higher the rate of the charges.

37 A significant challenge of using the formal forms for sending remittances is the system’s exclusion of some Ghanaians abroad, namely irregular migrants. The majority of MTCs and financial institutions, especially banks, demand State-issued identification and utility bills detailing one’s identification before allowing one to open an account. However, most irregular migrants, who form part of the Ghanaian diaspora and regularly send remittances, do not possess these identification documents and thus are excluded from using these forms of money transfer.

38Again, the refusal of financial institutions to pay remittances in foreign currencies, as well as the relatively lower exchange rates of the banks and MTCs compared to the forex, are some of the reasons why about 50 per cent of remittances from members of the Ghanaian diaspora are transferred through informal channels (Ahinful, Boateng and Oppong-Boakye 2013; Teye, Badasu and Yeaboah, 2019). Indeed, a more recent study by Teye, Badasu and Yeaboah (2019) indicates that financial institutions’ unfavourable exchange rates lead to high economic losses for both the senders and recipients of remittances. For example, a person in Ghana receiving USD 1,000 sent through a formal financial institution on 17 August 2020 would get GHC 5,230. If the sender had sent the same amount via an informal channel, such as through someone visiting Ghana, the recipient would have been able to exchange this through a forex bureau for GHC 5,770. Thus, the recipient would have received GHC 540 (USD 94) more, meaning that about 10 per cent of the amount sent would be lost by the person who received the money through the bank. The sender through the informal channel would also have saved on the transfer charges.

6. The Diaspora’s Non-Financial Remittances toward Ghana’s Development

39Discussions regarding the diaspora-development nexus are predominantly centred on the inflow of cash to home countries, technically ascribed as financial remittances. Other contributions toward development from migrant communities rarely receive any attention. The inability to quantify these forms of remittances in forex terms and the lack of data on them has contributed to the limited recognition of such resources in policy discourses on diaspora and development.

6.1. Individual In-Kind Remittances toward Community Well-Being

40Although we can observe the widespread presence of different formal institutions for financial remittances, most members of the Ghanaian diaspora also remit other forms of resources to improve their families’, friends’, and communities’ well-being. Door-to-door freight delivery services are a primary mechanism for such remittances, which generally transfer consumer goods, business equipment and physical assets from members of the Ghanaian diaspora living in Europe and North America.

41In a telephone interview, a door-to-door operative in Accra reported that about 80 per cent of these goods are food and household items such as canned meat and fish, milk, baby food, cooking oils, sanitary items, washing and cleaning detergents, food supplements, clothes, small home cooking appliances and stationery. The operative further noted that the freight service he works for has regular clients who deliver these items to their families and friends on average every two months. For example, an elderly client receives her package of household supplies, food items and medication from her daughter every other month (interview by the author, August 2020). Such supplies guarantee the well-being of their recipients, which is an essential component of human development.

42In the wake of the spiralling effects of food insecurity, aggravated by erratic rainfall patterns, reduction in the amount of rainfall and lack of food alternatives, food remittances as a form of in-kind remittance are undoubtedly crucial for survival among households. Sulemana, Anarfo and Quartey (2019) conducted a study in three northern regions of Ghana to test the relationship between in-kind remittances and households’ survival. They concluded that remittances are positively correlated with household food security. The study further noted that remittances’ frequency is essential, adding that people who receive fewer remittances are susceptible to food insecurity. In contrast, those who receive more remittances are unlikely to be food insecure.

6.2. Hometown and Community Associations as a Mode for the Maintenance of Emotional and Transgenerational Bonds

43There is a growing body of studies on hometown associations (HTAs) and their role in community development, particularly in rural areas across Ghana. Although these contributions are classified as diaspora philanthropy (Faal, 2019) and in most instances are not included in the declared amounts of financial remittances, their impact on poverty alleviation and provision of social intervention are appreciated by traditional authorities and recipients. The contributions of HTAs to home communities are telling, covering a spectrum of development initiatives from the provision of infrastructure to deprived communities through to rolling out social intervention programmes. Studies show that the enormous contributions of HTAs can be defined as an act of altruism and a means of giving back to society (Kandilige, 2017; Levitt, and Lamba-Nieves, 2011; Vasta and Kandilige, 2009; Orozco, 2005; Solimano, 2004). As posited by Kandilige (2017), this act of altruism also serves the interests of those who contribute to HTAs, sometimes serving as opportunities for investment. Some migrant associations aim to make a return on their investments but simultaneously provide a social function. These involve the construction of things such as recreational and educational facilities and guesthouses (Kandilige, 2017, 33).

44However, studies on Ghanaian HTAs have mainly focused on their contributions to development schemes in Ghana. HTAs are presented as avenues for raising funds for activities in members of the diaspora’s communities of origin. This chapter notes that within destination communities, HTAs additionally serve as spaces for socialisation, enabling people to maintain bonds with their communities of origin. Also, they are mechanisms for fostering emotional and transgenerational bonds. These roles are essential in maintaining a core and growing diaspora population that sustains the memory and culture of the community of origin among future descendants.

45HTAs also act as social networks for members of the diaspora in the places where they currently live. Moreover, they are spaces for the production and reproduction of sociocultural identities that sustain people’s ties with their home communities. The central ceremony for each of the known Ghanaian HTAs is the observance and celebration of annual traditional festivals associated with their Ghanaian communities of origin. For example, the Akwasidae Festival is celebrated by the Asante people and chiefs in Ashanti, Ghana, and Asante people in the diaspora. The festival is celebrated on Sunday, once every six weeks (Fuller, 2014). Other social activities organised by HTAs include annual parties, cultural celebrations and meet-and-greet events. Such events promote transgenerational transfers of linguistic, attitudinal and symbolic cultural norms that are essential for members of the diaspora to maintain ties with their communities of origin. Faist (2008) concludes that HTAs undoubtedly foster enduring relationships with families and clans in home countries.

46Additionally, these activities ensure the maintenance of people’s memories of their communities of origin and their ties with the next generation. These ceremonies present learning opportunities for children and descendants of diasporic Ghanaians. They are vessels for socialising the next generation of the Ghanaian diaspora. These celebrations are defined through modes of cultural reproduction or a type of consciousness (Vertovec, 1999), and are a principal source of ensuring that Ghanaian descendants and future generations maintain links with their parents’ communities of origin. While such remittances are necessary to maintaining the State’s relations with the diaspora, they have remained under-explored and under-appreciated in discourses on migration in general and on the diaspora-development nexus in particular.

6.3. Remittances of Skills and Knowledge

47Another critical aspect of remittances from the diaspora is the transfer of skills and knowledge that help to drive development projects. Through significant partnerships and effective networking, members of the Ghanaian diaspora with considerable expertise in particular fields bring their professional skills and expertise to stimulate development. The diaspora is extensively involved with measures like Migration for Development in Africa (MIDA), which seeks to curb brain drain from Ghana. Migrants who subscribe to such partnership programmes channel their expertise or bring their knowledge on certain issues to the fore, tackling complex and pressing problems inhibiting development (IOM, 2005). This aspect of the diaspora’s contribution to Ghana is realised, for example, through the facilitation of short visits by health professionals from migrant communities, who might adopt health facilities and provide services in urology, surgery, dentistry and other areas (Alhassan, 2010).

48In terms of education, universities in Ghana have benefited enormously from knowledge transfer programmes. For instance, the University of Ghana, under a Carnegie Next Generation of Academics in Africa Project, has been running a Diaspora Linkage Programme (UG-DLP) since 2011. This programme allows Ghanaian professors and research fellows in the diaspora to share their expertise with students in Ghana. Teye, Alhassan and Setrana (2017) underscore that since the inception of this programme in 2011, postgraduate education at the University of Ghana has benefited from the experiences shared by these Ghanaian researchers.

7. Conclusion

49This chapter deepens the discourse on diaspora and development in members of the diaspora’s country of origin. It notes that, collectively, members of the Ghanaian diaspora relate to the call for development at home. They have therefore responded in multiple ways, including by providing both financial and non-financial remittances. The Ghanaian government facilitates and guides the Ghanaian diaspora through formal gateways, which are directed mainly toward financial inflows.

50The two approaches for ensuring the safety of financial inflows in Ghana are money transfers and investment and savings options designed specifically for the Ghanaian diaspora. These options have formalised the inflow of cash to the country and, as the data indicate, are a significant source of revenue for the government’s development projects. However, due to structural challenges such as transfer costs, low exchange rates used by the financial institutions and their demands for identity documents, a high proportion of the Ghanaian diaspora continue to use informal means of sending remittances. These informal channels are unsafe and unreliable for the sender and receiver and drain Ghana of some of the benefits that can accrue from remittances (for example, savings and investments).

51Also, Ghana’s over-reliance on financial gateways ignores other sectors of the Ghanaian diaspora and their contributions. These include in-kind remittances such as the inflow of food items, household items, medications and school supplies. These items are generally delivered directly to the recipient through the door-to-door freight business model. Many households and communities rely on these remittances. Studies among Ghanaians indicate that they have a direct bearing on living standards among families and communities.

52Furthermore, members of the diaspora contribute significantly toward creating, maintaining and reproducing emotional bonds between themselves and communities in Ghana. For most members of the Ghanaian diaspora in North America and Europe, hometown associations have become the primary means of mobilising their cultural capital. The celebration of events such as hometown festivals and religious and social gatherings, allows members of the Ghanaian diaspora, through their respective HTAs, to promote transgenerational bonds through the transfer of linguistic, attitudinal and symbolic cultural norms.

53Finally, although diaspora scholarship acknowledges the complexities in the composition of diasporas, including sometimes acknowledging their various resources and transfers, policymaking remains inadequate to accommodate these variations. The limitations of a narrower conceptualisation of the diaspora and its potential value partly account for the government’s provision of limited formal gateways incapable of accommodating the multiple ways in which the Ghanaian diaspora can contribute to development at both the family and community levels. At the policy level, this study recommends conceptualising the Ghanaian, and more widely African, diaspora as a heterogeneous group endowed with varied resources. These people actively deploy their resources toward sustaining families and lives with specific and immediate concerns for their communities, both home and abroad.

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1 The World Bank lists 46 of Africa’s 54 countries as “sub-Saharan”, excluding Algeria, Djibouti, Egypt, Libya, Morocco, Somalia, Sudan and Tunisia.

2 Citizenship Act, 2000 (Act 591). . Available at (accessed on 5 May 2001).

3 Citizenship Regulations, 2001 (LI 1690). Available at (accessed on 5 May 2021).

4 The Diaspora Vote Committee was made up of Ghanaian migrants located particularly in the US to engage the government to enact laws that will allow them to vote in Ghanaian elections.

5 Representation of the People Act, 2006 (ROPAA, Act 699). Available at (accessed on 5 May 2021).

6 The Old Ghanaian Cedi (GHC) was replaced with the New Ghanaian Cedi (GHS) on 1 July 2007. However, GHC is used throughout this chapter.

7 In 2007, the Ghanaian government introduced a new currency, which was 0.0001 (1/10000) of the old currency. Around the time of issue of the bond, the GHC rate to USD was around 1 (GHC 50 million = USD 50 million). Subsequently the Ghanaian currency has devalued 80 per cent against the USD (as of 2021).

8 Please see footnote above for the conversion to USD.

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Cite this article

Electronic reference

Amanda Coffie, Channels for Financial and Non-financial Remittances from the Ghanaian Diaspora toward DevelopmentInternational Development Policy | Revue internationale de politique de développement [Online], 14 | 2022, Online since 25 April 2022, connection on 03 June 2023. URL:; DOI:

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About the author

Amanda Coffie

Amanda Coffie is a Research Fellow and Lecturer at the Legon Center for International Affairs and Diplomacy, University of Ghana. She holds a PhD in Political Science from Carleton University, Canada. Her research spans a continuum of forced migration: from conflict zones through asylum, repatriation, and transnational migration. Her work focuses on issues facing refugees, the governance of migration and asylum, and diaspora and programmes of host countries and international organisations, as well as post-conflict peacebuilding.

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