Remittance cuts poverty by 5% in Ghana

Remittance inflow has helped Ghana cut its poverty by 5 percent, according to the World Bank's annual "Global Economic Prospects" (GEP) report for 2006.

Migrant remittances have been directly associated with declining poverty in countries like Uganda, Bangladesh and Ghana. "They are also associated with increased household investments in education and health, as well as increased entrepreneurship," the Bank said.

In addition, remittances appear to help households maintain their consumption levels in the face of economic shocks and adversity. Remittances are also associated with increased household, investments in education and health, as well as bolstered entrepreneurship.

These conclusions are borne out by findings of a recent World Bank research study on "International Migration, Remittances and the Brain Drain."

But the fees charged by remittance service providers are often as high as 10 to 15 percent of the remitted amount for small transfers typically made by poor migrants. The GEP report recommends actions to reduce these fees, which are often much higher than the actual cost of carrying out the transactions.

Officially recorded remittances worldwide are estimated to exceed 232 billion dollars in 2005. Of this, developing countries are expected to receive 167 billion dollars, more than twice the volume of development aid from all sources.