A banking consultant, Dr. Richmond Atuahene, has called on the Bank of Ghana (BoG) to conduct a comprehensive forensic audit of remittance transactions over the past five years.

His call comes in response to the central bank’s recent decision to audit remittance inflows from October 1 to December 31, 2024.

The Bank of Ghana, in a public notice, stated that the objective of the audit is to assess the remittance process, enhance regulatory oversight, and ensure compliance with key financial laws, including the Foreign Exchange Act 2006 (Act 723). The review is also expected to evaluate how international money transfer regulations are being followed within the country’s financial system.

While Dr. Atuahene welcomed BoG’s initiative, he strongly believes that limiting the audit to the last quarter of 2024 is inadequate. He argues that a broader review covering at least five years is necessary to fully understand potential revenue losses from remittances and identify any systemic issues within the financial sector.

The Need for a Broader Audit

Dr. Atuahene emphasized the importance of extending the audit beyond the fourth quarter of 2024.

“I am very happy that they themselves have realised that the foreign remittances have not been coming as it’s supposed to be. So now that they say they’ll do the audit, I think it’s a step in the right direction but to me it is not enough.”
Dr. Richmond Atuahene

Dr. Atuahene pointed out that Ghana’s remittance landscape has undergone significant changes in recent years, particularly with the passage of the Payment and Settlement Systems Act 2019 (Act 987). According to him, this legislation, along with the rapid rise of financial technology (fintech) companies, has altered the way remittances are received and transferred in Ghana.

He believes that fintech firms and other players in the financial sector may have contributed to the outflow of foreign exchange through remittances, potentially depriving the country of much-needed revenue.

Dr. Atuahene stressed the importance of conducting a forensic audit to uncover any financial discrepancies or regulatory breaches that may have occurred over the years. He asserted, “We should check the audits back to see how much money has been externalized since 2019 when they passed the Payment and Settlement Services Act 219. I believe we should go further than that and learn lessons from that.”

His concerns stem from the increasing role of fintech companies in handling remittance transactions. While these companies have facilitated more efficient money transfers, they have also raised questions about regulatory compliance and the extent to which foreign exchange controls are being enforced.

Dr. Atuahene particularly highlighted the need to scrutinize fintech operations, stating, “All these things started when we talked about fintech and all these other NGOs”.

“These people [fintechs] have been externalizing the remittances and to me it’s a step in the right direction but I will urge the governor to move the goalpost back and let us do a forensic audit for the last five years to see how much the country has lost as far as remittances are concerned.”
Dr. Richmond Atuahene

Strengthening the Regulatory Framework

A more extensive audit, as suggested by Dr. Atuahene, could help the Bank of Ghana identify loopholes in the current regulatory framework governing foreign remittances. If significant revenue leakages are discovered, the findings could lead to stricter enforcement of existing laws and the introduction of new measures to ensure that Ghana maximizes its benefits from remittance inflows.

Foreign remittances play a crucial role in Ghana’s economy, contributing to household incomes and national foreign exchange reserves. Any inefficiencies or losses in this sector could have significant economic implications, particularly given the country’s ongoing efforts to stabilize its currency and boost foreign exchange reserves.

Dr. Atuahene’s call for a five-year forensic audit of remittance transactions underscores the need for greater transparency and regulatory oversight in Ghana’s financial sector. While he acknowledges the Bank of Ghana’s decision to audit remittance inflows in the last quarter of 2024, he insists that a broader review is necessary to uncover potential revenue losses and systemic issues.

If the Bank of Ghana heeds his call, the findings from the audit could help shape more robust policies to safeguard Ghana’s financial interests and optimize the benefits of remittance inflows.